Apple's stock is surging so far this year as investors anticipate the next iPhone success, but one Wall Street firm says the rally can continue even after the company's product event next week.



Bernstein reiterated its outperform rating on the smartphone maker's shares on Tuesday.



On "September 12th, Apple is expected to unveil the highly anticipated iPhone 8 alongside the next generation Apple Watch and Apple TV," analyst Toni Sacconaghi wrote in a note to clients. "We continue to believe that Apple offers attractive risk reward."



Sacconaghi shared his three top reasons why Apple's stock can go higher after the event next week:

1. "Consensus' view (on ASPs [average selling prices] and units) of iPhone 8 may still be too conservative, and Apple's stock has continued to outperform in iPhone cycles that have exceeded investor expectations."

2. "AAPL trades comfortably below its peak relative multiple during its last iPhone super-cycle (at a similar multiple, AAPL would trade at $186 on our FY 18 estimates which may be too low)."

3. "The potential contribution from currency and other products (HomePod, LTE Watch) may be material."

Apple has outpaced the market this year with its shares up 42 percent year to date through Friday, compared with the S&P 500's 11 percent gain.



The analyst reaffirmed his $175 price target for the company, which is 7 percent higher than Friday's closing price.



Sacconaghi also said that if the iPhone 8 comes out at a higher $999 price, it could add 70 cents to his $11.05 estimate for Apple's fiscal 2018 earnings per share. The higher price, compared with the $769 cost of the iPhone 7 Plus, is widely speculated on in the media, he said.

"We note that such pricing is not entirely outlandish, given Samsung's recent launch of the Galaxy Note 8 pricing that has a starting price tag of $960," the note said.