Introduction

Morgan Stanley has identified a selection of buy-rated global stocks that it believes will outperform the market. The bank’s analysts were asked to choose stocks with a high level of confidence that the market has not fully priced in their potential.

Pharmaceutical Stocks

Morgan Stanley has a buy rating or an “overweight” recommendation on three pharmaceutical stocks. One of these is Novo Nordisk, the manufacturer of the weight-loss drug Ozempic. The analysts anticipate an upgrade to Novo Nordisk’s guidance prior to the release of its 2Q results. Grifols, another drugmaker, is expected to deliver a solid performance, while Indivior is set for a strong quarter.

Deutsche Telekom

Deutsche Telekom is included in the buy list due to its improved outlook, driven by positive trends in the US and Germany.

Scout24

The entertainment company Scout24 is favored by Morgan Stanley for its steady subscription revenues.

Saint-Gobain

Morgan Stanley has chosen French materials manufacturer Saint-Gobain, citing the market’s failure to fully incorporate the company management’s optimistic margin expectations shared during its annual general meeting.

RWE

Energy company RWE is considered an overweight choice by the analysts, who predict earnings-per-share upgrades in the future.

Conclusion

Morgan Stanley’s analysts believe that reporting seasons in the post-COVID era have been characterized by positive surprises. While they anticipate another positive beat ratio for 2Q23, they also expect a slowdown in global and European economic momentum, resulting in beat levels returning to normal.