Introduction

Morgan Stanley has identified a number of buy-rated global stocks that it believes will outperform the market. In a recent investor note, the bank asked its analysts to select stocks where they have high confidence that the market has not accurately priced in their potential earnings announcements.

Pharmaceutical Stocks

Among the buy-rated stocks, Morgan Stanley highlighted three pharmaceutical companies. One of them is Novo Nordisk, the manufacturer of the weight-loss drug Ozempic. The analysts expect Ozempic to drive an upgrade to the company’s guidance before its second-quarter results announcement on August 10. The bank also expressed positivity towards Grifols, anticipating a solid performance, and Indivior, which is poised for a strong quarter.

Deutsche Telekom

Deutsche Telekom, the telecommunications company, made it onto Morgan Stanley’s buy list due to an improved outlook. The bank cited better trends in the US and Germany as contributing factors for its inclusion.

Scout24

Morgan Stanley also expressed a favorable view of Scout24, an entertainment company, primarily because of its steady subscription revenues.

Saint-Gobain

French materials manufacturer Saint-Gobain is another stock pick by Morgan Stanley. The bank noted that the market consensus has not yet accounted for the management’s optimism regarding margins, which was discussed at the company’s annual general meeting last month.

RWE

Energy company RWE is considered an overweight choice by the analysts at Morgan Stanley. They anticipate earnings-per-share upgrades in the future.

Conclusion

Morgan Stanley’s analysts, led by Giorgio Magagnotti, believe that reporting seasons in the post-COVID era have brought positive surprises. While they expect another positive beat ratio for the second quarter of 2023, they also predict that the magnitude of these beats will be closer to normal levels due to a slowdown in global and European economic momentum.