Apple stock is a good pick amid a downbeat outlook for the hardware sector

Morgan Stanley analyst Erik Woodring warned that a sharp drop in sales of personal computers and consumer electronics during recent quarters would negatively affect computer hardware stocks. He chopped earnings, valuations and target prices for all the stocks he deals with. 

Nevertheless, Woodring is optimistic about Apple stock. He doesn't assume the company is completely immune to weakening consumer spending and adds that his channel checks show stronger demand in recent months than it was expected previously.

Woodring raised his estimates for Apple for September and December, as increased demand for iPhones, iPads and Macs more than offset declining demand for wearable devices and services. His assessment for both quarters is now slightly above Street's consensus estimates, but the analyst's new forecast for the March quarter is below consensus. Woodring lowers his target on Apple stock from $180 to $177.