Apple CEO Tim Cook Justin Sullivan/Getty Images Apple is getting an upgrade from previously bearish Jefferies analyst Peter Misek.

Misek is rating the stock a "buy" with a $600 price target, up from being a "hold" with a $450 price target.

The reason for his newfound optimism? Improving margins and the iPhone 6.

Apple's suppliers have become "far more lenient on price," says Misek. This is going to boost Apple's gross margins. Earlier in the year, suppliers were telling Misek that they would be able to dictate prices to Apple, and Apple's margins would get hammered. That's no longer the case.

Suppliers also say Apple is targeting a 4.8-inch iPhone for the iPhone 6.

Misek thinks that over 50% of the smartphones sold today are bigger than 4-inches, the current size of the iPhone. Apple has been missing out on over half the market by not offering a bigger phone.

As the bigger iPhone gets further into development, he expects investor enthusiasm.

There is some negativity in Misek's report, though. He says Apple is cutting orders for the iPhone 5C because it's not selling as well as hoped. He thinks Apple could end up cutting prices to boost sales.