Even as equities recover from a turbulent start to August, Morgan Stanley prefers to pick stocks on a name by name basis. The S & P 500 has erased losses from a steep sell-off that started August trading. Both the broad market index and the Nasdaq Composite are up about 1.
7% month-to-date, while the Dow Jones Industrial Average is slightly positive. Stocks have taken a breather in recent days, however. "The market has recovered from its sell off the first week of August but the future remains uncertain as we look to the upcoming jobs report to provide confidence that near term risks to growth have subsided," equity strategist Michelle Weaver wrote on Wednesday.
"Careful stock selection based on idiosyncratic factors is especially important in this type of environment." Here's a look at some of the firm's top picks, including Apple and DraftKings . All the stocks on the list have an overweight rating from Morgan Stanley.
Shares of the iPhone maker have gained 17% in 2024. Morgan Stanley's $273 per share price target implies more than 20% upside from Wednesday's close. Apple's forthcoming artificial intelligence suite, labeled Apple Intelligence and spearheaded by the rollout of iPhone 16 in September, is a key tailwind that could drive the company's largest handset upgrade cycle to date, Morgan Stanley said.
AAPL YTD mountain Apple stock has climbed more than 17% in 2024. But "longer-term, investments in AI, payments, cloud, health, and home, and long runway to grow spend per user from $1/day today are key arguments for sustained long-term growth and value creation," analyst Erik Woodring said. Sports betting platform DraftKings has seen shares edge down roughly 2%.
Morgan Stanley forecasts about 43% upside ahead, based on its $47 per share price target. Analyst Stephen Grambling expects U.S.
online sports betting to grow into a $27 billion market in 2026 and said DraftKings will remain the top player with a forecasted 30% market share. DKNG YTD mountain DraftKings stock. "Investors question [long-term] profits, but other developed markets have shown 25-30%+ profits for operators at maturity, [especially] those with a customer [acquisition] advantage similar to DKNG," Grambling said.
In the financial sector, the firm lists M & T Bank as a top pick. Shares have gained about 19% in 2024. "We favor MTB for its excess capital and liquidity position which makes it more resilient to a challenging macro and regulatory environment versus peers," analyst Manan Gosalia wrote.
Gosalia also noted that the company's current valuation may present an attractive entry point, with the analyst's $220 per share price target implying a price-to-earnings ratio of 13 times 2025 full-year earnings estimates. The stock closed Wednesday at $162.91, or 35% below the firm's target price.
MTB YTD mountain M & T Bank stock. Other top picks include Colgate-Palmolive and Nvidia ..
