These 5 companies are set to crush earnings, Morgan Stanley says

  • The earnings season so far indicates that Wall Street has overestimated many companies, according to equity analysts at Morgan Stanley.
  • Investors should find out the stocks that are undervalued by Wall Street so that their portfolio returns can see a boost when these companies beat earnings forecasts, they said.
  • They issued a list of companies they believe will post better-than-expected earnings.

The earning results so far indicate that Wall Street has overestimated many companies, according to Morgan Stanley.

As the earnings season heats up, investors should find out the stocks that are undervalued by Wall Street so that their portfolio returns can see a boost when these companies beat earnings forecasts.

“Despite heavy revisions lower (-2.7%) over the last month of the year, to date 4Q18 earnings are still at the low end of the normal 4-6% range for earnings season beats,” Morgan Stanley analysts said in a note out on Thursday.

To help traders get more market insights, the firm issued a list of companies that it believes will rally after posting better-than-expected earnings.

Here are the companies that Morgan Stanley listed, in ascending order of their potential upsides (comparing Morgan Stanley’s price target to where shares were trading as of February 1).


GW Pharmaceuticals

Markets Insider

Ticket: GWPH

Sector: Healthcare

Price Target: $US221

Potential Upside: +52%

Source: Morgan Stanley


Molina Healthcare

Markets Insider

Ticket: MOH

Sector: Healthcare

Price Target: $US180

Potential Upside: +31%

Source: Morgan Stanley


Sonos

Markets Insider

Ticket: SONO

Sector: Technology

Price Target: $US15

Potential Upside: +25%

Source: Morgan Stanley


Pluralsight

Markets Insider

Ticket: PS

Sector: Technology

Price Target: $US33

Potential Upside: +10%

Source: Morgan Stanley


DocuSign

Markets Insider

Ticket: DOCU

Sector: Technology

Price Target: $US53

Potential Upside: +7%

Source: Morgan Stanley


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