Morgan Stanley is one of the oldest banks and financial services companies in the world. One of the many services that they offer is research analysis about the current state of the stock market, assisting investors in making good financial decisions.
As such, their analysts often recommend stocks for purchase by giving them an “Overweight” rating, which is equivalent to a Buy rating.
An overweight rating from Morgan Stanley is intended to represent a stock that should outperform. With that in mind, here is a list of some of the stocks that Morgan Stanley is currently recommending.
Rivian Automotive (RIVN)
- Company Description: Rivian Automotive is a company that makes “electric adventure” vehicles. In other words, they make SUVs, pickups, and related cars. The twist? The cars are electric. This means that they have a modern twist on a classic type of car manufacturer. In addition to making the cars, Rivian is engaged in the innovation of the electric motor and battery. This puts it in an excellent position to take advantage of the emerging electric market, a market that was only boosted with last year’s passage of the federal infrastructure bill.
- Reason For Recommendation: As of January, Morgan Stanley gave Rivian an Overweight rating, meaning that it expected the stock to outperform its competitors. It recently said that its stock may surge as much as 160%, citing its extensive investments and positive consumer sentiment.
Wells Fargo (WFC)
- Company Description: Wells Fargo is an international banking conglomerate. It has tens of millions of customers and operates in 35 different countries. It performs a variety of financial services, including banking, investing, lending, and more. It is 37th on the Fortune 500 list of worldwide corporations.
- Reason For Recommendation: Morgan Stanley believes that banks and financials are poised to perform well in a high-interest rate, high inflation environment. This is because these companies stand to profit from Federal Reserve rate hikes. Morgan Stanley claims that Wells Fargo is well-positioned to take advantage of the current economic climate. Recent changes have increased both the target price and the overall rating of the Wells Fargo stock.
Northrop Grumann Corporation (NOC)
- Company Description: Northrop Grumman is an aerospace and defense company. It is extensively engaged in both of these areas. One of its biggest customers is the United States military and other branches of government, and the company has numerous contracts in this area. This has helped to make NOC an attractive investment, and one that has been positively recommended by numerous analysts – including Morgan Stanley.
- Reason For Recommendation: Morgan Stanley has rated NOC as Overweight. It has cited its continued strong fundamentals and international presence as part of the reason for this strong rating. It has also beaten expectations in the 3rd and 4th quarters of 2021, leading numerous hedge funds to buy more shares of the stock.
Lockheed Martin Corporation (LMT)
- Company Description: Lockheed Martin is heavily involved in the aerospace, military and defense sector of the economy. In this capacity, it contracts to a variety of private and public firms – including the United States government. It is headquartered in the United States and produces jets, weapons, and more. It is also a very large employer within the country, employing over 114,000 people worldwide.
- Reason for Recommendations: Like many of the stocks on this list, Lockheed Martin holds an overweight rating. It has consistently outperformed its financial expectations and has a solid cash flow, thanks in no small part to its relatively unique space within the defense world. It is also owned by 51 hedge funds, a sign of its institutional popularity.
Morgan Stanley has also made some recent stock changes that should be taken into account:
Marathon Petroleum (MPC)
- Company Description: Marathon Petroleum is involved in oil extraction and exploration. It also operates the largest oil refining system in the entire country.
- Nature of Upgrade: Target raised from $85 to $90. Stock rated as equal weight.
- Reason for Upgrade: Rising interest rates and positive economic growth bode well for companies in the energy sector, and Marathon is well-positioned to take advantage of the changing economic times.
Brinker International (EAT)
- Company Description: Brinker International is a casual dining chain. It owns a variety of chain restaurants throughout the world, including Chili’s, Maggiano’s Little Italy, It’s Just Wings and more. It operates in a franchise model across a diverse array of industries and locations.
- Nature of Upgrade: Target raised from $43 to $44. Equal weight rating reaffirmed.
- Reason for Upgrade: Solid fundamentals and an improving economic outlook. The Omicron variant should also encourage more people to go outdoors and eat.
Qualcomm (QCOM)
- Company Description: Qualcomm is involved in the design and manufacture of semiconductors, wireless technology, and electronic innovation. Its technology has helped to power the mobile and handheld computing revolution that has taken over much of the world, and it has a long history of involvement in the technology industry, dating back to the creation of the first 2G network. As such, the company has always been a relatively reliable investment with its extensive patents that produce a steady stream of royalties.
- Nature of Upgrade: Target raised from $215 to $223. Overweight rating reaffirmed.
- Reason for Upgrade: Morgan Stanley named the stock among the likely top performers in the semiconductor space in 2022. Indeed, it has repeatedly upgraded the stock and its target over the past year. This is on the basis of its fundamental success, despite a difficult market environment, particularly in terms of labor and chip shortages.
Under Armour (UA)
- Company Description: Under Armour is a seller of sports equipment. The company manufactures a variety of sports and gym wear that has proven to be very popular among athletes, gym attendees, and more. It is known for a variety of clothing lines and appeals, with a specific focus on undergarments and casual wear.
- Nature of Upgrade: Upgraded to Overweight. Target increased from $23 to $24.
- Reason for Upgrade: In its note about the upgrade, Morgan Stanley said that it believed Under Armour was better positioned than its competitors to rebound. Indeed, its new forecast reflected that, with Morgan Stanley saying that it believes the company could increase its share price by as much as 25%. The company has also seen a steady positive turnaround of its fundamentals, including earnings, employees, assets, and more.
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