Apple to rally more than 20% this year on the next iPhone's new features, Guggenheim says

An employee scans an iPhone 7 smartphone for a customer at an Apple store in San Francisco.
Michael Short | Bloomberg | Getty Images

Investors should buy Apple shares because new innovations on the iPhone 8 will drive better demand, according to Guggenheim, which initiated coverage on the company with a buy rating.

The tech giant's next-generation iPhone could "drive a big new upgrade cycle," analyst Robert Cihra wrote in a note to clients Tuesday. "We believe any hardware changes [on the iPhone 8] have the potential to make an iPhone look 'new' again for the first time in three generations."