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Investment bank Credit Suisse reiterated its outperform rating on Apple (AAPL) stock on Friday and raised its price target to 160 from 150 on expectations that the upcoming iPhone 8 will fuel a big upgrade cycle and boost average selling prices.

Apple shares rose 0.3% to 139.14 on the stock market today. The stock is within striking distance of its all-time high of 140.28, reached on March 2.

In a report, Credit Suisse analyst Kulbinder Garcha said recent leaks from Apple's supply chain in Asia support his bullish thesis on the iPhone 8 cycle.

"We remain comfortable with our thesis around the iPhone business returning to solid growth over the next two years with improved product mix," Garcha said. "Combined with a powerful services story we reiterate our Outperform (rating) and raise our target price to $160 (was $150)."

Reports indicate that Apple is planning an initial iPhone 8 production run of 100 million to 110 million units, which suggests moderate growth, Garcha said.

The iPhone 8 is expected to be announced in September along with updated versions of the current-generation handsets, which likely will be called the iPhone 7S and iPhone 7S Plus.

IBD'S TAKE: Apple stock has an IBD Composite Rating of 84, meaning it has outperformed 84% of stocks in key metrics over the past 12 months. For more information on Apple stock, visit the IBD Stock Checkup.

The iPhone 8 is rumored to feature a borderless OLED display, glass-sandwich design, augmented reality capability and no physical home button, as well as wireless battery charging and superfast wired charging.

As much as 70% of the new iPhone production mix could be for the OLED-screen iPhone 8, Garcha said.

He sees a bill-of-materials increase of $50 to $100 for the OLED iPhone, which Apple will pass on to consumers in higher handset prices.

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