Apple Inc. (NASDAQ: AAPL) received a favorable analyst call from Canaccord Genuity following its most recent earnings report. The call was made based on the growing iPhone user base, which should drive steady long-term sales and strong cash flows.

Analysis from Apple’s fiscal first quarter would suggest that the company absolutely dominated the smartphone market during the December quarter, capturing 93% of industry profits.

Canaccord Genuity believes that strong iPhone 6 replacement sales should continue during the 2015 calendar year. The firm projects that at this point only 15% of current estimated 404 million iPhone users have upgraded to the new devices.

Over the longer term, a gradually moderating growth rate is expected between the calendar years 2016 and 2018, with 650 million iPhone users by the end of that term. Canaccord Genuity noted that, in the 2018 calendar year, global premium smartphone subscribers are anticipated to total 1.82 billion.

The firm anticipates steady long-term iPhone replacement sales within this growing iPhone installed base. Canaccord Genuity believes that the modest base growth expectations, coupled with long-term replacement sales, would position Apple for steady sales of roughly $210 million to $215 million iPhone units annually between the 2015 and 2018 calendar years.

These levels of iPhone sales should generate strong annual cash flows to easily fund a long-term capital returns program. Apple could further monetize this large iPhone user base through additional products, software and services to help drive ongoing long-term sales growth. As a result of all these opportunities, Canaccord Genuity is setting its 2016 calendar year earnings per share (EPS) estimate at $9.42. The firm’s price target of $145 is based on a multiplier of 15 times 2016 calendar year EPS.

Following Apple’s most recent earnings report, analysts have been jumping all over the tech giant. Credit Suisse made a very bullish call last week with a price target of $140, and Canaccord Genuity has now come over the top of it.

Canaccord Genuity stated in the report:

Apple’s strong December quarter results and guidance are consistent with our surveys and analysis indicating a strong iPhone 6 upgrade cycle should continue through C’15 driven by two primary reasons. First, given our estimate only 15% of the iPhone installed base has upgraded to the iPhone 6 devices, we anticipate continued very strong replacement sales to existing iPhone consumers. Second, we anticipate further high-end smartphone market share gains for the larger screen iPhone 6 devices as our surveys indicate a greater mix of Android smartphone consumers are switching to the iPhone 6 smartphones than in the iPhone 5 series launches.

Apple shares were up about 0.5% at $119.55 in the second half of Monday’s trading day. The stock has a consensus analyst price target of $131.20 and a 52-week trading range of $73.05 to $120.51.

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