Investors worry too much about Sirona Dental Systems' plans for a low-end scanner, and they don't appreciate the significance of an upgrade to the company's Cerec in-office software, according to Citi analyst Jonathan Beake.

Beake said in a research note on Tuesday that he had raised his price target on the shares to $83 from $80.10 and reaffirmed a "Buy" rating on the stock.

Sirona Dental Systems Inc. develops and sells dental products that include restoration systems, three-dimensional imaging systems and hand pieces. Shares of the New York company climbed above $70 last month after it reported fiscal first-quarter earnings. The stock then topped $73 before slipping.

Beake said the planned scanner launch largely drove the price change, with investors worried in part about the pressure it will put on profitability.

"We believe that this has received too much investor attention, and the most important launch was largely missed by consensus," the analyst wrote.

He said the company's software upgrade saves time for dentists placing a crown or bridge because significantly less adjustment is required. The analyst said he believes the upgrade will make the product more attractive to dentists who had previously dismissed the technology.

Sirona shares finished at $72.05 on Monday.