Morgan Stanley says buy these five stocks that are set to rally

CNBC

a day ago

Morgan Stanley highlighted five stocks that have plenty of upside, according to the investment bank's analysts. The firm says companies such as Chewy are compelling and their stocks have more room to run. The other overweight-rated names include: Ulta , NuBank, Chart Industries and Coupang. Chart Industries Morgan Stanley analyst Daniel Kutz is doubling down on shares of the gas and liquification company. The bank named the stock a new top pick following its merger agreement with Flowserve in early June. "The deal pulls forward key GTLS initiatives but regardless, we view GTLS's organic growth prospects as compelling, and deal-related upside as a potential incremental valuation boost," he wrote. Further, Kutz is bullish on the growth targets the company has set out and believes shares could be severely undervalued if they're achieved. Chart is also defensive in an uncertain macroeconomic environment, with deal synergies that are too attractive to ignore. A combined Chart and Flowserve "could buoy what we view as an already compelling growth and relative valuation story for GTLS shares," he went on. The stock is up nearly 18% over the past 12 months. Ulta Beauty Shares of the beauty company are also too attractive to ignore at current prices, according to analyst Simeon Gutman. Morgan Stanley said in a recent note that commentary from other peers in the beauty sector suggest improving trends, which Gutman says bodes well for Ulta. "While ULTA's compares in 2H25 become slightly more difficult, we suspect the current guide is conservative, and paves [the] way for upside given the industry forecast," he wrote. In addition, Gutman says Ulta faces minimal tariff risk. Meanwhile shares are more than 22% higher in the last year. "We think there is upside as ULTA sustains its momentum in [market] share gains," the analyst said. Coupang The Korean e-commerce company was recently named a top pick by analyst Seyon Park. "The company continues to execute well, is relatively insulated from tariff risk, and [is] a beneficiary of a weaker [U.S. dollar]," he wrote. Park says competitors are unsuccessfully scrambling to try and keep up with Coupang's market share gains. "Coupang's fully integrated fulfillment and delivery capability gives it a clear competitive advantage in Korea's eCommerce market, driving sustained share gains and operating leverage," he said. Yet even with the shares higher by 40% in just the past three months, Park says the stock's valuation remains attractive. "No stopping the Product Commerce flywheel in Korea," he said. Chewy "Our deep dive on the clinic opportunity shows an underpriced call option on an already compelling story; CHWY is our Top Pick: Chewy launched its first vet clinic last year, entering the $40B market. Clinics should prove to be a strong standalone segment with compelling 4-wall unit economics and we estimate a ~2.5x-5.0x ROI per clinic." Read more. Chart Industries The deal pulls forward key GTLS initiatives but regardless, we view GTLS's organic growth prospects as compelling & deal-related upside as a potential incremental valuation boost. ... Yet, some question whether the 'juice is worth the squeeze'. We're sympathetic to this push-back, but overall, our End Market & Macro Driver Analysis supports our view that [the] transaction offers benefits which could buoy what we view as an already compelling growth & relative valuation story for GTLS shares." NuBank "Despite rising investor interest in Brazil's payroll loan segment, we believe the market still underestimates NU's ability to quickly become a leading player in this space. ... We forecast NU will reach 10% market share in payroll loans by the end of 2026 — versus sell-side expectations of just 3-4%." Ulta "While ULTA's compares in 2H25 become slightly more difficult, we suspect the current guide is conservative, and paves way for upside given the industry forecast. ... ULTA is well-positioned, given '25 is a low bar (comps/EBIT margin guidance of +0.8%/~11.8% at the midpoint) and there is minimal tariff risk. We think there is upside as ULTA sustains its momentum in share gains." Coupang "The company continues to execute well, is relatively insulated from tariff risk, and a beneficiary of a weaker USD. ... No stopping the Product Commerce flywheel in Korea. ... Coupang's fully integrated fulfillment and delivery capability gives it a clear competitive advantage in Korea's eCommerce market, driving sustained share gains and operating leverage."