Apple shares will rise as consumers buy more expensive iPhones, according to one Wall Street firm.
UBS raised its price target to $210 from $190 for Apple shares, representing 12 percent upside to Thursday's close. The firm cited the premium nature of the company's brand.
The firm's consumer survey "results indicate weak iPhone buying intentions but a rising mix, so continued unit pressure but potential for a flat-to-up ASP [average selling price]," analyst Steven Milunovich said in a note to clients Friday. "Buying intent is down slightly across the world though the mix of iPhone X appears strong. The brand remains aspirational. … We do think the P/E could rise over time as Apple is perceived more like Nike than like Nokia."
Milunovich reiterated his buy rating on Apple shares.
He noted that 44 percent of planned purchases in the UBS survey of consumers are for the more expensive iPhone X, which is up from the 30 percent level in the previous October survey.
"Although the next big thing is not in sight, the consistency and optionality of the Apple franchise could improve the P/E over time," he said. "We think the narrative is shifting from iPhone units to a consistent franchise with low single-digit hardware growth augmented by higher-margin, faster growing services."
Shares of Apple closed up 1.8 percent on Friday.
— CNBC's Michael Bloom contributed to this story.