5 shares to buy (and hold) according to Morgan Stanley

The global economic outlook worsens amid new signs of financial stress from China and established fears of high-interest rates for longer due to inflation struggling to come down.

According to Morgan Stanley, however, there are interesting investment opportunities that combine growth potential and resilience, ensuring stability to portfolios even in the current context of market fragility.

Here are the 5 shares to buy (and hold) for the rest of 2023 according to the investment bank.

1) Nvidia and the AI revolution

Nvidia shines among Morgan Stanley’s "Top Pick" with an "overweight" rating and a $500 price target. Shortages of artificial intelligence chips and increased investment in emerging technology are driving the stock higher (nearly +200% year-to-date). The recent decline in shares is being seen as an advantageous opportunity for investors to trade in on weakness. Projections point to quarterly revenues of $7.5 billion for the data center industry, fueling excitement as demand outstrips supply for AI chips. Nvidia DGX, an AI supercomputer, facilitates access to AI technology through cloud computing. According to CEO Jensen Huang, artificial intelligence has reached its "tipping point" this year and Nvidia has the capabilities to dominate the wave of investment in AI, a market worth more than $600 billion.

2) Apple stands out among the big techs

Apple stands out in the universe of tech giants and its inclusion among Morgan Stanley’s "Top Picks" is not without merit. The reason behind this choice goes beyond mere market sentiment. According to the investment bank, there are several factors capable of triggering a new rise in Apple’s shares, helping to strengthen its position as a leading investment.

Among these elements, the launch of the new iPhone 15 plays a central role, which could relaunch Apple’s position in the market. Additionally, an acceleration in services growth could make a significant contribution to the business trajectory. What makes Apple attractive as an investment opportunity are the favorable outlook on profit margins, the possible introduction of a hardware subscription service, and India’s economic boom, which could contribute to a 20% growth to the stock by 2028.

The investment bank has set Apple’s target price at $215 with an "Overweight" rating.

3) Keurig Dr. Pepper

Among the most promising stocks on Morgan Stanley’s radar is Keurig Dr. Pepper, a leader in the soft drink and coffee maker industry. The investment bank is particularly optimistic about Keurig Dr. Pepper (Equal Weight with a target price of $39.00), underlining how the company is well aligned with the strategic plan. This rating is based primarily on Keurig’s ongoing efforts to improve its foundation in the coffee industry, a strategy that promises future growth. Morgan Stanley’s optimism also comes from identifying positive catalysts on the horizon, suggesting that Keurig still has plenty of room to grow.

4) CBOE Global Markets

In the world of financial markets, CBOE Global Markets represents excellence. According to Morgan Stanley, the owner of the Chicago Board Options Exchange has considerable potential to grow further. "In a more uncertain macro environment and with an increasing probability of recession, CBOE Global Markets’ business model (70% of revenues) offers enormous growth potential", reads a note to investors.

Morgan Stanley raised its price target on the stock by 19% to $140, raising its revenue estimates by 5% for 2022 and 9% for 2023.

5) Howmet Aerospace

In the ever-changing environment of the aerospace industry, Howmet Aerospace is another outstanding performer. The company, which specializes in aerospace components, has already recorded an impressive increase of more than 25% in the value of its shares this year. Morgan Stanley strongly believes that the firm has a strong aptitude for generating cash flow, aided by a top-notch balance sheet. These elements provide a solid foundation for future growth. The prospect of increasing shareholder compensation, combined with the current positive cycle in the commercial aerospace industry, acts as a catalyst for the company’s further potential.

Conclusions

In the investment arena, uncertainty is a constant companion. However, Morgan Stanley’s insights offer an optimistic outlook. The selection of "Top Picks" includes a diverse range of industries, each with different growth prospects. While investors may experience periods of high volatility, these choices can offer stability and growth within an investment portfolio.

Original article published on Money.it Italy 2023-08-26 09:50:00. Original title: 5 azioni da comprare (e tenere) secondo Morgan Stanley