Shares of Apple (AAPL - Get Report)  are already trading up over 21% year-to-date to $140.8 on Friday, but Pacific Crest thinks a dividend boost could support a $175 bull case, according to a note sent to investors Friday morning.

"Repatriation of offshore cash could allow a dramatic increase in Apple's dividend yield. A comparison to IBM (IBM - Get Report) suggests this could support meaningful stock appreciation, even if the outlook for growth beyond the next iPhone cycle were poor," Pacific Crest analyst Andy Hargreaves wrote.

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Pacific Crest, which has an overweight rating on Apple, said that repatriation would give the company the opportunity to increase its regular dividend without impacting strategic flexibility. The current environment favors companies with large cash stockpiles overseas because President Donald Trump is expected to make it easier for companies to bring that money back home by reducing the repatriation tax rate. Apple currently has $246 billion in cash, with $230 billion of that amount held overseas. 

A higher dividend could support the bullish target of $175 per share even if Apple's iPhone sales stall after it releases the highly anticipated iPhone 8 (also known as iPhone X) this fall, he argues. That's because IBM's example shows that a stock's share price can increase significantly based on its dividend, even if earnings and revenue fail to impress. 

Having that $230 billion in cash would also give Apple the opportunity to boost its services business through acquisitions. "This could help provide a substantial services growth story, which, along with a strong cash return profile, would help support elevated P/E and EV/ EBITDA multiples," Hargreaves explained. 

His comments come after Apple CEO Tim Cook said on the company's first quarter earnings call in January that it wants to double its services business by 2020, which would amount to about $50 billion in revenue for the full year. 

Earlier this week, RBC Capital analyst Amit Daryanani said in order to grow at that rate, Apple may need to look into "sizable M&A." "Assuming the install base grows by (about) 8%, it would imply either ARPU growth is 10% or AAPL needs to do sizable M&A to achieve their target. If growth is organically driven by ARPU, we could see that as a powerful driver for multiple expansion," he wrote. "FY16 was the first year when ARPU grew significantly and Services growth was greater than install base growth."

Loup Ventures founder Gene Munster said he thinks Apple will make bigger deals but that it won't buy brands. He also noted that Loup thinks the following potential takeover targets are off the table at this point: Netflix (NFLX - Get Report) , Twitter (TWTR - Get Report) , Tesla (TSLA - Get Report) , Yelp  (YELP - Get Report) and Disney (DIS - Get Report) . 

Munster said he thinks Apple's services growth will come from investing heavily into its original content plans and from M&A around artificial reality (AR). The tech giant's first original series, a reality app competition show called  Planet of the Apps, will debut on its music subscription service Apple Music this spring.

Even though Apple is already trading around Pacific Crest's $140 price target, the firm thinks its current estimates give room for upside from the upcoming iPhone cycle later this year. The firm expects Apple to post earnings of $2.03 for the 2017 second current on revenue of $52.9 billion. 

"That, along with the potential for upside associated with higher cash returns in a repatriation scenario, justify continued ownership of AAPL, in our view," Hargreaves concluded.