Ahead of Apple's (NASDAQ:AAPL) fiscal fourth-quarter earnings next week, investment firm Piper Jaffray has named (via Fortune) the tech giant's stock its top large-cap stock pick for the rest of the year and into 2016. Jaffray's senior analyst Gene Munster reaffirmed a $172 12-month price target. This represents a whopping 56% increase from where shares are trading today.

Rose gold iPhone 6s. Image source: Apple.

What makes Munster so confident in Apple as an investment? The analyst cites three catalysts:

Hot products
Apple's fresh suite of new products, including the iPhone 6s and iPhone 6s plus, Apple Watch, iPad Pro, and an upcoming launch of an overhauled Apple TV, are not fully priced into Apple's stock price, Munster argues.

The analyst has a point. While the company will almost certain struggle to maintain the 26% year-over-year revenue growth and the 40% year-over-year earnings per share growth it posted during the trailing 12 months, Apple's current price-to-earning ratio of around 12 prices in little to no growth at all. So, Apple doesn't have to serve up the same monstrous growth it has during recent quarters to outperform what the Street has priced the stock for.

iPhone upgrade program
Apple's iPhone upgrade program was received with considerable fanfare among analysts when it was announced in September. Analysts seemed to agree the program would serve as meaningful driver for iPhone sales over the long haul. But despite the program's positive reception, the stock has floundered since it was launched along with its new iPhones this fall.

Munster believes the program is undervalued, estimating it will have huge implications. The percentage of Apple's iPhone user base that upgrades to a new iPhone every year will increase from one out 10 customers today to three out of four by the end 0f 2018, he projects.

iPhone 7
While analysts generally agree that the iPhone 6s line will be a successful product cycle for Apple, Munster is already looking ahead to the launch of iPhone 7. Though the phone isn't expected to launch until September next year, he believes it will begin to drive investor optimism ahead of its launch.

The iPhone 7, Munster says, will drive a "more revolutionary cycle." Likely to sport a new form factor, Munster predicts the phone will drive meaningful sales growth in Apple's biggest product segment.

The significance of two of these catalysts -- Apple's robust portfolio of refreshed products and its iPhone upgrade program -- will begin to shine through in the company's guidance for Q1. Munster expects Apple to guide for $77 billion in first-quarter revenue. This would represent 3.2% year-over-year revenue growth compared to the company's first fiscal quarter of 2015. A small year-over-year gain, but notable in light of just how huge Apple's holiday quarter was last year.

While the catalysts Munster cites to support his $172 price target seem reasonable, investors should eye the price target itself with skepticism. Not only are any 12-month predictions unreliable because of a long list of market factors and unknowns that could shift sentiment toward a stock in such a short time frame, but it's also worth noting Apple has traded close to 10 times earnings on several occasions during the past few years, so it's not very unusual for the market to discount the company's future potential so substantially.

The best way for investors to benefit from reports like these is usually to ignore the price target and consider the analysis of the underlying business. When it comes to Munster's analysis of the company and its tailwinds, he has a few good points. Indeed, he at least helps support the case for continuing to hold the stock over the long haul. But will Apple trade at $172 within 12 months? Who knows?