Apple Inc. (AAPL) shares have been enjoying a higher valuation relative to the S&P 500 Index lately and that has everything to do with stock buybacks and little to do with its flagsh

That’s according to BMO Capital, which raised its price target on the stock to $184 from $171. In a research note covered by Barron’s, BMO Capital analyst Tim Long said the price target had to be lifted because of the capital returns program at Apple, which he characterized as “huge.” At $184 a share, the analyst is below Apple’s closing price of $191.61 a share on Monday (July 23.)

“AAPL traded nearly at parity with the S&P back in 2014 as excitement for the first large screen iPhones (iPhone 6 and 6 Plus) was building,” wrote the analyst in the research note. “AAPL is currently trading at only an 8% discount to the S&P (down from 17% three months ago), while on a three- and five-year historical average, it has typically traded at a 23% and 20% discount, respectively. We believe the stock is trading at a premium relative valuation based primarily on the huge stock buyback program.” (See more: Apple Led Company Stock Buybacks During Q1.)

Apple Buyback Prompted By Tax Reform

Thanks to President Donald Trump’s tax bill, companies including Apple received a boost as the corporate tax rate was cut to 21% from 35% and a tax break on bringing cash back in overseas was introduced. Apple said in May it would buy back $100 billion in shares and raise its dividend 16% to $0.73 per share. The company has $267.2 billion in cash as of the end of the March quarter. In February Apple's Chief Financial Officer Luca Maestri said that given the increased “financial and operational flexibility” to its cash held overseas, “we are targeting to become approximately net cash neutral over time.” (See more: Apple to Lower Prices on New Crop of iPhones: MS.)

iPhone Replacement Cycle Could Lengthen

Outside of a strong capital return program on the part of the Cupertino, California-based iPhone maker, Long expressed concerns that the next iteration of the iPhone expected in fall won’t help its business or the stock as the time between phone upgrades on the part of consumers continues to lengthen. Long said the average iPhone replacement cycle now hovers around the mid-two-year market. He thinks that could get longer if there aren’t any “compelling” launches in September. “Every 0.1-year change in replacement rate leads to 8 million units sold,” wrote the analyst. As for China, which Long views as the iPhone’s most important market, he said share has been on the decline as consumers opt for local brands.