Morgan Stanley analyst Katy Huberty raised her price target on Apple (AAPL) shares to $234 from $222 citing a rerating of Services peers' multiples, stating that she believes "the stock can continue to work from here" despite the rally of over 40% from its January lows.
She contends that investors still don't fully appreciate the strength of Apple's platform, noting that Street revenue forecasts have been left largely unchanged despite Apple nearly doubling the number of Services offered this year. For context, she noted that iCloud and Apple Music contributed an average of roughly 300 basis points to Services revenue growth in their first full year following their launches.
Additionally, Huberty noted that iPhone data points stabilized early in the March quarter, pointing to a positive inflection in China's active installed base share and Taiwan supplier monthly sales having improved at March quarter end.
She keeps an Overweight rating on Apple shares.
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