Apple Inc. (NASDAQ: AAPL) might not be one of the best performing Dow stocks of 2016 thus far, but one key analyst believes that it could rise over 30% this year. Although Apple’s performance might not be saying much at this point — because there is still a lot of 2016 left — its outlook is better than all in the Dow Jones Industrial Average, which is down roughly 10% in just the first week of trading in the new year.

Right now we can see the impact on the market of falling oil, a strong dollar and rising interest rates. However, these are not large hurdles for Apple to overcome, compared to most other companies.

Merrill Lynch upgraded Apple to a Buy rating from Neutral rating with a price objective of $130. Its downgrade last August was on concerns over a lackluster iPhone 6s cycle. However, recent negative estimate revisions and multiple supply chain data points have pressured the stock, and in the firm’s opinion these worries are largely now discounted by investors.

This investment bank is bullish on several potential opportunities, including the launch of the new Apple Watch, iPhone 6c, capital return update and the iPhone 7 launch in 2016. Key reasons for the upgrade are:

• A China Apple survey that indicates continuing strong demand for iPhones
• Potential release of iPhone 6c (four-inch version) that could drive increased conversions from feature phones
• Apple stock remaining underweight at long-only funds, with possible room for upside as investors increase their holdings
• Large cash balance that offers the optionality to enter new markets and create new revenue streams

Merrill Lynch also updated its earnings estimates for the 2016 fiscal year. The firm expects $9.32 in earnings per share (EPS) on $237 billion in revenue. The consensus estimates call for EPS of $9.59 and $239 billion in revenue.

Shares of Apple were trading up 1.4% at $99.95 Tuesday morning, with a consensus analyst price target $142.98 and a 52-week trading range of $92.00 to $134.54.

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