Credit Suisse analyst Kulbinder Garcha has upped his target price on Apple from $160 to $170.

In a note to clients, Garcha affirms his ongoing belief that the market underestimates the gross profit contribution from Apple’s growing Services business.

Garcha sees the growth potential and recurring revenue Apple’s Services business drives in terms of retention. It also drive replacement cycles in Apple’s hardware business.

Garcha also reiterates an Outperform rating on Apple shares.

MacDailyNews Note: Currently, in pre-market trading, Apple is off slightly ($-0.39, -0.27%) to $141.44.

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]