A top Apple analyst agrees iPhone sales will fall, but says that's a huge buying opportunity

Piper Jaffray analyst Gene Munster agrees with other analysts that Apple is about to experience a grim milestone: sales of the iPhone will experience their first ever year-on-year decline when the company reports its quarterly earnings report next week.

This widespread sentiment has sent Apple shares 28% from their 52-week high.

But Munster says the poor demand for the current iPhone 6S and the negative Wall Street reaction is setting up Apple's stock for a big pop by September, when the new iPhone 7 is expected to roll out.

"We believe shares of AAPL could achieve upside of over 50% from current levels by the iPhone 7 launch in September," Munster writes in a note to investors.

All about the multiple

Munster points out that Apple's stock is currently trading at 9.7 times its estimated calendar 2017 EPS, which is basically as low as the stock has traded in the past 10 years.

The only time Apple's stock had a lower multiple was in April 2013, a period that Munster argues is very similar to the current situation. At that time Apple was coming off a "somewhat disappointing" iPhone 5 launch and delivering slow, single-digit iPhone unit growth and overall revenue growth.

Fast forward one year after April 2013, and Apple shares were up 50%, Munster says. After two years the stock was up 120%.

Munster also notes that investors typically bid up Apple's multiple in the six months leading up to the September iPhone launches. That's been the case in three of the last four iPhone launches, at least.

Of course, Munster's bullish forecast assumes that Wall Street believes Apple will have a hit with the iPhone 7, which we're just beginning to hear the first rumors about. But that's not such a sure thing. Earlier this week, analyst firm Raymond James raised eyebrows with a report that said it did not expect the upcoming iPhone 7 to increase sales.

Just as Apple's expected decline in iPhone 6 sales represents an unprecedented change for the company, the demand for the next phone, and the stock's performance, could all be entering into uncharted territory.