Morgan Stanley’s 20 Top Stock Picks (S&P Complete Indices:SP500)

Morgan Stanley North America research analysts selected 20 of their highest conviction stocks within each industry.

Analyst Michelle M. Weaver said that although the market has recovered from the summer sell-off, “the future remains uncertain as we look to the upcoming jobs report to provide confidence that near term risks to growth have subsided.”

In addition, stock specific risk is still elevated for the S&P 500 (SP500), currently in the 80^th percentile with about 63% of the returns coming from idiosyncratic factors, she said.

Stock specific risk is also elevated for all sectors but utilities (XLU) at above the 66^th percentile and specifically high relative to history for financials (XLF), energy (XLE), and communication services (XLC).

The top picks, all overweight, are:

• Apple (AAPL) – percentage upside to price target: 21% / Price target: 273
• Colgate-Palmolive (CL) – percentage upside to price target: 9% / Price target: 111
• Comcast (CMCSA) – percentage upside to price target: 21% / Price target: 48
• Cummins (CMI) – percentage upside to price target: 13% / Price target: 341
• DraftKings (DKNG) – percentage upside to price target: 38% / Price target: 47
• Eli Lily & Co (LLY) – percentage upside to price target: 20% / Price target: 1,106
• FTAI Aviation (FTAI) – percentage upside to price target: 23% / Price target: 140
• Hasbro (HAS) – percentage upside to price target: 19% / Price target: 79
• LifeStance Health Group (LFST) – percentage upside to price target: 77% / Price target: 10
• M&T Bank (MTB) – percentage upside to price target: 35% / Price target: 220
• Nasdaq (NDAQ) – percentage upside to price target: 22% / Price target: 85
• Natera (NTRA) – percentage upside to price target: 6% / Price target: 132
• NVIDIA (NVDA) – percentage upside to price target: 16% / Price target: 144
• PepsiCo (PEP) – percentage upside to price target: 7% / Price target: 185
• Schlumberger (SLB) – percentage upside to price target: 45% / Price target: 65
• Spotify (SPOT) – percentage upside to price target: 19% / Price target: 400
• Tesla (TSLA) – percentage upside to price target: 43% / Price target: 310
• Thermo Fisher Scientific (TMO) – percentage upside to price target: 8% / Price target: 655
• Toast (TOST) – percentage upside to price target: 21% / Price target: 30
• UnitedHealth (UNH) – percentage upside to price target: 6% / Price target: 615