Bank of America upgraded Apple shares to buy from neutral on Monday, saying the recent pullback in the stock "presents opportunity."

The bank also raised its 12-month price target to $210 from $180. Apple's shares rose 2.5 percent to $177.17.

Here's what analyst Wamsi Mohan said in the note about the upgrade:

"AAPL stock is down 26% from its peak (S&P down 9%) and up 9% YTD (inline with S&P 500 and below the [tech sector's return] of 13%). Our scenario analysis suggests that shares are discounting a "declining hardware" scenario (ex-cash, services), and the debate hinges on the L/T trajectory. In our opinion, weakness in hardware is not entirely structural. Our new PO of $210 is based on assumptions closer to scenario 2 (flat hardware, and somewhat slower than historical growth in Services)."

Mohan, who made a prescient downgrade of the stock at the start of November, listed in the note eight other reasons why Apple is a buy now, including "stability of supply chain order cuts" and "growth across healthcare, wearables and increasing services penetration."

The analyst also noted that some of the weakness in China could be blamed on the strength of the U.S. dollar and now that China's yuan has rebounded vs. the dollar this year, it could become a positive for Apple sales in the country.

— With reporting by CNBC's Michael Bloom