Nomura Instinet analyst Jeffrey Kvaal raised his price target for Apple shares to $185 from $175 ahead of the company's launch event on September 12. The stock closed yesterday down $1.97 to $162.08. Apple is entering the "long awaited iPhone supercycle on its front foot," Kvaal tells investors in a research note.

Operating system base growth and "pent-up demand" give the analyst confidence in his above-consensus estimates. He believes Apple will end fiscal year 2017 with 663M iOS users, up from 400M in fiscal year 2014. Consensus estimates for Apple's 2018 look conservative, Kvaal argues. He assumes the iPhone 8 offers an OLED edge-to-edge screen, better dual cameras, and 3D sensing, but not a fingerprint sensor under the screen. The analyst keeps a Buy rating on Apple.