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William Edwards
2024-04-24T08:30:01Z
- Q1 2024 earnings season has arrived, and Morgan Stanley has some ideas on which stocks have upside.
- In a recent client note, the bank listed 11 stocks its analysts believe will jump on earnings data.
- Below, we've listed the stocks along with how much upside they have to price targets.
Earnings reports can often be upside catalysts for stocks if a firm outperforms in the prior quarter or issues guidance for stronger revenue. For example, shares of Tesla jumped by 7% on Tuesday after the company said it plans on moving up its production plans on its more affordable EV model.
With 2024's first-quarter earnings season entering full swing, Morgan Stanley has some ideas about which other stocks are well-positioned to surge this time.
In an April 17 client note, the bank shared 11 stocks under its coverage that its analysts believe have upside from current levels and which should receive a boost in the weeks ahead when the firms report Q1 earnings.
We've listed the 11 stocks below alphabetically, along with their respective sectors, analyst commentary on why each stands to rise, and how much upside each has to its Morgan Stanley price target.
The complete 2024 Q1 earnings calendar can be found here.
1. Abbvie
Ticker: ABBV
Sector: Healthcare
Price target: $196
Upside to price target: 16%
Analyst: Terence Flynn
Analyst commentary: "If Skyrizi, Rinvoq and aesthetics post solid 1Q results and the company reiterates 2024 guidance, we expect ABBV shares could somewhat recover."
Source: Morgan Stanley
2. Amazon
Ticker: AMZN
Sector: Technology
Price target: $215
Upside to price target: 20%
Analyst: Brian Nowak
Analyst commentary: "We see the catalyst of a significant 1Q profit beat (we are 18% above Street EBIT) and 2Q guide (we are 5% above street EBIT) starting to shine the light on better profit and cash flow to come driven by continued improvement in cost to serve."
Source: Morgan Stanley
3. Corning
Ticker: GLW
Sector: Technology
Price target: $35
Upside to price target: 10.7%
Analyst: Meta Marshall
Analyst commentary: "After an extended period of weak demand across GLW's portfolio (company believes ~50% of the business is currently at recessionary levels) – we see a constructive set-up on Q1 and believe the bias for estimates skews to the upside over the NTM."
Source: Morgan Stanley
4. Cullen/Frost Bankers
Ticker: CFR
Sector: Financials
Price target: $117
Upside to price target: 2.4%
Analyst: Manan Gosalia
Analyst commentary: "CFR is a beneficiary of fewer rate cuts given their high levels of liquidity, strong loan growth, and low loan-to-deposit ratio. In advance of earnings, we published a note evaluating 8 key factors that are likely to drive NII given the recent move in the forward curve, and CFR screens most positively among the Midcap banks in our coverage. We believe CFR is most likely to raise their NII guide meaningfully on their earnings call on April 25th, driving upward EPS revisions across the street."
Source: Morgan Stanley
5. Lazard
Ticker: LAZ
Sector: Financials
Price target: $58
Upside to price target: 46%
Analyst: Ryan Kenny
Analyst commentary: "Our 1Q24 EPS is the Street High for LAZ (MSe $0.82, 71% above consensus) driven primarily by strong Dealogic data in the quarter, where revenues are tracking +37% q/q and +90% y/y."
Source: Morgan Stanley
6. LifeStance Health
Ticker: LFST
Sector: Healthcare
Price target: $10
Upside to price target: 63%
Analyst: Craig Hettenbach
Analyst commentary: "We see a compelling entry point in LFST ahead of Q1'24 earnings. Despite posting the strongest Q4'23 earnings (beat and raise across all key metrics) in our coverage late February, LFST is more than 10% below where the stock was prior to the report. Investor positioning remains extremely negative (short interest is 22% of the float), overlooking solid fundamentals and improving execution."
Source: Morgan Stanley
7. Nvidia
Ticker: NVDA
Sector: Technology
Price target: $1,000
Upside to price target: 21%
Analyst: Joseph Moore
Analyst commentary: "NVDA continues to see strong spending trends in AI, with upward revisions in demand from some of the newer customers such as Tesla and various sovereigns. While sentiment is quite bullish long term, there is some near term anxiety about a product transition, with a high profile ramp of next generation 'Blackwell' in August creating concerns that there could be a pause in demand for previous generation H100 products that still compose the majority of revenues. Our checks show no such pause, as underlying demand is strong enough that there are likely claims on most of the Hopper generation through year end.
"We expect a beat to consensus estimates for the April quarter and strong guidance, setting the stage for another series of positive EPS revisions."
Source: Morgan Stanley
8. Paccar
Ticker: PCAR
Sector: Transportation
Price target: $147
Upside to price target: 30%
Analyst: Angel Castillo
Analyst commentary: "Investors remain cautious and even somewhat skeptical of the strength in the NA Truck market over the last year, which has steadily beat expectations and diverged from an otherwise weak trucker profitability backdrop. Heading into 1Q24 investors' concerns have been bolstered by a softening in the March preliminary North America Class 8 net orders and a continued build in industry inventory. While understandable and worth keeping an eye on, we think these are more than offset by a variety of other factors pointing to the likelihood of a better than expected set of results for PCAR in 1Q24 and throughout the year.
"Net net, we see an attractive set up ahead of 1Q and remain buyers of PCAR into the quarter."
Source: Morgan Stanley
9. S&P Global
Ticker: SPGI
Sector: Financials
Price target: $500
Upside to price target: 21%
Analyst: Toni Kaplan
Analyst commentary: "We expect SPGI to beat street estimates given the strong credit capital markets activity in the quarter and higher equity prices in 1Q24 earnings."
Source: Morgan Stanley
10. SBA Communications
Ticker: SBAC
Sector: Telecom services
Price target: $243
Upside to price target: 22%
Analyst: Simon Flannery
Analyst commentary: "We expect a solid 1Q24 earnings print on April 29. We continue to see further momentum for towers based on our most recent 1Q24 AlphaWise Tower Talk Survey… which for the second consecutive quarter has shown improvement in tower leasing trends. SBA provided a conservative 2024 guidance last quarter, providing room for potential upside to expectations."
Source: Morgan Stanley
11. Seagate Technology
Ticker: STX
Sector: Technology
Price target: $115
Upside to price target: 33%
Analyst: Erik Woodring
Analyst commentary: "We expect STX to beat and raise vs. Consensus at March quarter earnings on Tuesday, April 23rd, as our intra-quarter checks suggest that STX's HDD production improved modestly in the March quarter, and should continue to grow Q/Q into the June quarter, which alongside stronger than expected pricing, supports our above Consensus March/ June quarter revenue (3% above Consensus) and EPS (20-28% above Consensus) forecasts.
"We also expect management to clarify on the earnings call that they are shipping limited volumes of HAMR drives in F3Q-F4Q24, and re-iterate that qualifications for the final batch of HAMR drives should be completed by May, leaving STX largely ontrack to ramp HAMR volumes in C2H24 and into CY25. As a result, we see earnings on April 23rd as a positive stock catalyst that can help STX shares re-rate towards our $115 price target, which is based on 10.5-11x FY27 EPS of $10.61."
Source: Morgan Stanley
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