Morgan Stanley analyst Katy Huberty raised the price target on Apple (NASDAQ: AAPL) to $247.00 (from $231.00) for 4 reasons:

1) investor sentiment continues to surprise the analyst as unusually negative, with call volume throughout the quarter at recent lows despite shares bouncing back ~20% from the May bottom

2) the analyst expects June quarter Services revenue growth to accelerate (by ~3 points, normalized) for the first time since the March 2018 quarter, a key catalyst for regaining investor confidence in the Services narrative and multiple re-rating

3) June quarter iPhone data held up in the analyst's checks, with China showing an improvement from the March quarter and domestic checks remaining consistent

4) the September quarter consensus estimates imply a low bar, with Morgan Stanley's Asia hardware team recently raising September quarter iPhone builds ahead of our forecast and consensus modeling Services growth deceleration despite easing App Store comps

No change to the Overweight rating.