Apple (AAPL) - Get Report is in a strong position thanks to avenues of deeper integration available to the tech giant, according to a bullish note from RBC Capital Markets that initiated coverage on Apple shares with an outperform rating and $295 price target. 

RBC is bullish on the iPhone because the product has become "deeply ingrained in everyday life." While analyst Robert Muller does see an elongating product replacement cycle, RBC still doesn't foresee a decline in smartphone penetration.

The firm also is bullish on the company's balance sheet which gives Apple the strength to return "significant cash flow to shareholders."

"Since 2015, AAPL has repurchased $242BN of common shares, over 3x the amount of the second-place Microsoft (MSFT) - Get Report and Oracle (ORCL) - Get Report . At present, AAPL has $100BN of net cash on hand," Muller said. "With management's intention to achieve a cash-neutral position, we expect the majority of that amount to return to investors via buybacks."

When it comes to the company's $295 price target, the firm admits that its 20x future estimates multiple is high when compared with peers but "we believe the brand strength and margin profile, among other considerations, justify the current valuation. In essence, we believe investors receive a nearly free call option on all future innovation."

There are some headwinds for Apple, however.  

A series of tweets about the Apple Card escalated into a debacle for the tech giant and its partner, Goldman Sachs (GS) - Get Report .

Over the weekend, David Heinemeier Hansson, a developer and founder at Basecamp, published a string of messages alleging gender bias in how credit is assigned for the new Apple Card. 

In those tweets, Hansson wrote that he was granted a credit limit that was 20 times higher than his wife's, despite her higher score and their purportedly equal incomes in the eyes of the IRS.

Apple shares were roughly flat in premarket trading Tuesday at $261.96.

Apple, Microsoft and Goldman Sachs are holdings in Jim Cramer's Action Alerts PLUS charitable trust. Want to be alerted before Jim Cramer buys or sells AAPL, MSFT or GS? Learn more now.