"We believe Apple's recent underperformance is likely overdone." -- Analyst Katy Huberty
Read More Morgan Stanley: Apple's sales data and its stock price are headed for a showdown
Apple's App Store revenue in April was softer than she expected -- except in China.
Katy Huberty measures the FX headwinds and warranty accrual tailwinds behind the surprising 42.5% gross margin that Apple reported Wednesday.
Read More Morgan Stanley expects 40+% gross margins from Apple for foreseeable future
Analyst Katy Huberty expects Apple's shares to "re-rate" when the company reports its fiscal Q2 earnings next Wednesday.
Analyst Katy Huberty said "peer multiple pressure" drove her Apple target down. If anything, Apple is dragging down the FAAMG.
"It's the bargain of the group!" says Cramer, comparing Apple's valuation to the rest of the FAANG.
Read More Jim Cramer shrugs off Katy Huberty's Apple price target cut (video)
Meanwhile, she's convinced that the Street's Services forecasts for the next two years are too low.
Read More Katy Huberty lowers Apple target, cites peer pressure
"We view recent iPhone supply chain data points as noise rather than an indicator of demand."
Analyst Katy Huberty is "incrementally more positive" after the latest round of supply chain checks.
Read More Morgan Stanley: Apple's March quarter looking good
But analyst Katy Huberty argues that, relative to Apple's S&P 500 weighting, institutions are still underweight the stock.
Read More Morgan Stanley: Institutional ownership of Apple nears all-time highs
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