Investors should buy Apple shares because the premium-priced iPhone 8 will drive earnings above expectations next year, according to Credit Suisse, which reiterated its outperform rating.
"We remain convinced that the iPhone product cycle will be significant in terms of driving multi-year unit growth, and maintain our conviction on Apple's ability to introduce new higher pricing tiers with improved mix," analyst Kulbinder Garcha wrote in a note to clients Tuesday entitled "8 Super-cycle – rising demand, rising price."
"Given this, as well as a high retention rate, we see the 8 Super-cycle will unleash pent-up demand," he wrote.
As a result,
The analyst also reaffirmed his Apple price target of $170, representing 10 percent upside to Monday's close.
"Apple has historically raised iPhone prices along with key updates," he wrote. "Given its affluent user base, a significant feature upgrade, limited price elasticity
The company's shares are up 33 percent year to date through Monday compared with the S&P 500's 7 percent return in the same time period.