The S&P 500 hit new 2016 highs this week, but Apple Inc. AAPL 1.51% shareholders haven’t been invited to the market party.

So far in 2016, Apple shares remain down 5.6 percent on fears that the iPhone market may have finally become saturated.

While that may be the case, UBS analyst Steven Milunovich still sees as much as $60 of upside for Apple’s stock.

UBS recently ran a DCF analysis of Apple based on six different iPhone scenarios and concluded that the stock is currently pricing in weak future iPhone sales. The only major downside for Apple from its current level is if the iPhone repeats the fate of BlackBerry Ltd BBRY 1.29% devices.

“However if new products are 25–50 percent as successful as the iPhone a high bar, we estimate there is upside to $130–160,” Milunovich concluded.

To reach this full potential, Milunovich believes Apple will have to demonstrate extremely strong services growth and/or generate a major new product hit, such as an Apple Car.

UBS believes…

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