Ananda Baruah at Brean Capital said in a new research note that Apple Inc. (NASDAQ: AAPL) is worth $170 per share, citing Apple's ability to beat earnings expectations this quarter as impetus for the shares to climb higher.

In fact, Brean argued that Apple can "deliver material EPS upside" as the result of higher iPhone shipments, strong gross margins and operating expense leverage.

For the immediate quarter, Baruah said that Apple could see EPS of $1.90 to $2, higher than the Estimize consensus of $1.84. To get there, Apple will have revenues of $52.5 billion to $53 billion, also above the Estimize consensus of $49.1 billion. The Wall Street forecasts come in even lower, estimating EPS of $1.77 on revenues of $48.8 billion.

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That higher revenue will be driven by stronger-than-expected iPhone sales. Baruah forecast that as many as 53 million units were shipped. Since Apple estimated roughly 49 million units, this would "signify material unit upside to guidance." Brean also suggested that the mixture of sales could contain more Plus models, adding gross margin "upside as well."

But, according to the Baruah, this is not just a one quarter phenomena. The "Street remains materially low on iPhones through '17," the note added. In 2016 and 2017, that gap between Wall Street's forecasts and Brean's expectation grows further to where Apple "can generate 10% - 15% unit upside" over the next two years.

Year-to-date, the company has outperformed the broad index, gaining 14 percent compared with gains of 5.4 percent in the Nasdaq 100. At the $170 forecast, Apple's market cap would be just shy of $1 trillion at $982 billion.

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