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Morgan Stanley: These 10 Stocks Will Help Beat The Slowdown

December 18
10:33 2018

As we move nearer to 2019 the sentiment is growing increasingly cautious. Talk of inverted yield curves and the ongoing US-China trade war certainly aren’t boosting sentiment. But even within these conditions, there are still stellar stock picks with strong fundamentals and high growth potential.

You don’t even have to look that far to find them. Morgan Stanley has just released a report revealing its stock picks for 2019. They see 2019 as a year of consolidation for the stock market. However, the names singled out in the report are capable of growing earnings- even if the economy slows and the market weakens.

Here we select 10 of the firm’s most compelling stock picks. As you will see all ten stocks boast a ‘Strong Buy’ analyst consensus rating. And their upside potential doesn’t look too bad either. Note that you can click on the link at the end of each stock section to dig deeper into the stock’s Street rating.

With that in mind, let’s see why Morgan Stanley believes these stocks have such a strong outlook right now:

1. Alphabet (GOOGL Research Report)

“As the dominant player in paid search, Google continues to benefit from secular growth as advertising dollars shift into digital,” the firm’s Brian Nowak (Track Record & Ratings) said.

Most notably, Google also owns YouTube, the leader in online video advertising. Indeed, Novak sees video advertising expanding nearly 25% from 2017 to 2020 to ~$22bn in the US alone.

With a ‘Strong Buy’ analyst consensus, the company’s $1,349 average price target speaks of 29% upside potential ahead. See what other Top Analysts are saying about GOOGL.

2. Amazon (AMZN Research Report)

Also on Nowak’s list: Amazon. “As the dominant player in US eCommerce, Amazon continues to experience secular growth as retail dollars shift online,” the analyst explained.

AMZN has a ‘significant opportunity’ to capture a larger piece of the ~$1tn worldwide eCommerce market (ex China) thanks to the company’s growing logistics network and Prime membership program.

All told, 37 out of 38 analysts covering the stock are bullish. That’s with a $2,152 average price target (32% upside potential). See what other Top Analysts are saying about AMZN.

3. BioMarin (BMRN Research Report)

With seven products on the market today, this biotech stock boasts a powerful rare disease and gene therapy platform.

“We believe the strong base business, which generated ~$1.3B in sales in 2017, coupled with a diverse and promising pipeline that could generate blockbuster drugs makes BioMarin a unique large cap biotech story,” Matthew Harrison (Track Record & Ratings) told investors.

According to Harrison, key secular tailwinds include a low probability of competition and a deep and wide pipeline with drugs that could launch by 2020.

From current levels, analysts (on average) see this ‘Strong Buy’ stock surging 33%. See what other Top Analysts are saying about BMRN.

4. Expedia (EXPE Research Report)

Back to internet land for this leading online travel player. Like other online stocks, Expedia continues to benefit from secular growth as travel dollars shift online.

“The $1.3 trillion global travel industry remains a highly fragmented market and both BKNG and EXPE look well positioned given their scale advantages and portfolio of brands. In all, over the next 3 years we expect EXPE’s bookings to grow at an 11% CAGR” wrote Nowak.

Indeed, the Street is forecasting a 28% rise in share prices for EXPE. That’s with 12 buy ratings vs 3 hold ratings over the last three months. See what other Top Analysts are saying about EXPE.

5. Illumina (ILMN Research Report)

Genetic sequencing stock Illumian gets the thumbs up from Morgan Stanley’s Steve Beushaw (Track Record & Ratings).

“As the dominant provider of technology to sequence DNA, ILMN stands to benefit from a series of market developments and policy changes that have emerged over the last year,” Beuchaw said.

This boils down to:  1) The success of DNA-driven drug administration in immunotherapy by Merck 2) Stronger global pharma and government funding for DNA analysis 3) Growing consumer interest in DNA-derived applications; and 4) Growing global research funding for genomic research.

In terms of share price, the Street is modelling for 14% upside ahead. This would take this ‘Strong Buy’ stock to $367. See what other Top Analysts are saying about ILMN.

6. Intuitive Surgical (ISRG Research Report)

“Intuitive Surgical is the leader in robotic surgery,” the firm’s David Lewis (Track Record & Ratings) said. Already the company’s da Vinci robotic system has racked up five million procedures. That’s with 44,000 da Vinci surgeons trained worldwide.

Lewis added: “The company has gained significant adoption within urology and gynecology and is still in the relatively early stages of penetration internationally and within broader procedures (including general surgery).”

With 8 buy ratings vs 2 hold ratings, analysts forecast 24% upside for shares. See what other Top Analysts are saying about ISRG.

7. Mastercard (MA Research Report)

Morgan Stanley’s James Faucette (Track Record & Ratings) picks Mastercard as a top financial stock for 2019.

“MA’s compounding growth drivers include (i) strong global consumer spending, (ii) market share gains, and (iii) the secular shift to card from cash” the analyst writes.

Plus he sees MA as a savvy defensive pick. “As the second-largest global card network (behind Visa), MA is well positioned to benefit from market share gains in particular regions and consumer spending trends, which have been fairly resilient even through economic cycles.”

All the Street’s top analysts have a buy rating on MA. Meanwhile their $238 average price target works out at 21% upside from current levels. See what other Top Analysts are saying about MA.

8. National Vision Holdings (EYE Research Report)

National Vision is one of the largest and fastest growing optical retailers in the US.

“We believe EYE offers a unique blend of defensiveness and growth vis-à-vis its focus on value within the non-cyclical optical retail segment and ~50% unit growth runway,” Simeon Gutman (Track Record & Ratings) said.

The numbers speak for themselves. As Gutman points out, “EYE has delivered 67 consecutive quarters of positive SSS and is expected to grow square footage ~10% annually over the next several years.”

Plus the upside potential looks very compelling. Analysts see shares exploding by over 50% to $49. See what other Top Analysts are saying about EYE.

9. Palo Alto (PANW Research Report)

This cybersecurity stock is singled out by Keith Weiss (Track Record & Ratings) as well positioned for future industry trends.

“To garner more effectiveness and efficiency in information security architectures, we believe the key secular trend in security will be the consolidation of spending towards integrated security platforms” revealed this five-star analyst.

And Weiss believes PANW can emerge victorious: “Palo Alto Networks stands well positioned to excel within that trend given its leadership in core network security and growing traction into areas such as Endpoint, Cloud, and Security Analytics.”

Encouragingly, its $241 average price target suggests 38% upside potential for this ‘Strong Buy’ stock. See what other Top Analysts are saying about PANW.

10. Pluralsight (PS Research Report)

Despite what its name might suggest, this isn’t another vision-related stock! Pluralsight is an online education company that IT and software video training courses through its website.

“We believe Pluralsight is well positioned to help enterprises address the need for IT knowledge while managing an accelerating industrywide talent gap,” commented Brian Essex (Track Record & Ratings).

He continues, “The platform is driven by machine learning technology that not only enables a more efficient learning process at the individual level but also enables enterprises to efficiently quantify, develop, and manage talent across technology platforms.”

Five analysts have rated the stock in the last three months. All are bullish. They see 38% upside potential ahead. See what other Top Analysts are saying about PS.

Enjoy Research Reports on the Stocks in this Article:

Alphabet (GOOGL) Research Report

Amazon (AMZN) Research Report

BioMarin (BMRN) Research Report

Expedia (EXPE) Research Report

Illumina (ILMN) Research Report

Intuitive Surgical (ISRG) Research Report

Mastercard (MA) Research Report

National Vision Holdings (EYE) Research Report

Palo Alto Networks (PANW) Research Report

Pluralsight (PS) Research Report

Find fresh investing inspiration with the TipRanks Analysts’ Top Stocks tool. This tool gives you the lowdown on the most popular stocks from the Street’s top analysts. These are the analysts that consistently outperform. You can find ‘Strong Buy’ stocks in the sector that interests you now. Go to Analysts’ Top Stocks now.

Continue Reading at Tip Ranks

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