8 months ago
15 names that Morgan Stanley’s analysts expect to move meaningfully on earnings
Investing.com -- Morgan Stanley expects a “normal” earnings beat rate for the second quarter, with S&P 500 EPS growth forecast at 5% year-over-year and sales up 4%.
However, the Wall Street firm sees earnings growth as skewed toward the largest tech names, estimating 14% growth for the Magnificent 7 versus a 3% decline for the remaining 493 constituents.
Analysts also flagged key uncertainties ahead of the results, including the extent of tariff pass-through to margins, potential downward revisions to Q3/Q4 estimates, and how pricing power is holding up across income groups.
Within this framework, Morgan Stanley highlights 15 stocks expected to move meaningfully on earnings.
Thirteen of these names are seen with upside potential, including Argenx (NASDAQ:ARGX), Atlassian (NASDAQ: NASDAQ:TEAM), Chewy (NYSE: NYSE:CHWY), CVS Health (NYSE: NYSE:CVS), DraftKings (NASDAQ: NASDAQ:DKNG), Eaton (NYSE: NYSE:ETN), Eli Lilly (NYSE: NYSE:LLY), F5 (NASDAQ: FFIV), NVIDIA (NASDAQ: NVDA), Omada Health Inc (NASDAQ:OMDA), Southwest Airlines (NYSE: NYSE:LUV), Valley National Bancorp (NASDAQ: NASDAQ:VLY), and Western Digital (NASDAQ: NASDAQ:WDC).
Two—National Storage Affiliates (NYSE: NSA) and Teradyne Inc (NASDAQ:TER) —are seen at risk of moving lower.
Among the top upside names, Argenx is backed by strong commercial momentum for Vyvgart and a pipeline that Morgan Stanley believes is underappreciated.
“We believe ARGX has a positive setup heading into Q2 earnings,” strategists led by Michelle M. Weaver said, with Vyvgart’s commercial progress in myasthenia gravis (MG) and chronic inflammatory demyelinating polyneuropathy (CIDP) expected to remain in focus.
Analysts also see potential upside from upcoming Phase 3 data in seronegative MG.
On Atlassian, strategists believe the stock has a “compelling setup ahead of earnings,” with channel feedback pointing to stable performance despite macro concerns.
Morgan Stanley expects the company to guide for 18% revenue growth in fiscal year 2026 (FY26), which could clear lowered buy-side expectations.
Chewy is expected to beat on both revenue and EBITDA, supported by strong web traffic and app engagement, along with improving fulfillment efficiency. Morgan Stanley calls Chewy its “top pick in SMID eCommerce,” citing accelerating share gains and margin expansion potential.
For Nvidia (NASDAQ:NVDA), Morgan Stanley sees the tech behemoth as well-positioned into earnings, with accelerating rack-scale shipments and strong demand for its Blackwell products likely to drive upside.
The firm expects a larger revenue jump in the October quarter than current consensus, supported by improving supply and the potential resumption of H20 shipments to China. While several overhangs have begun to ease, consensus estimates remain unchanged.
CVS is viewed as better positioned than peers, with less exposure to Medicaid and healthcare exchanges. Analysts believe “simply a maintained 2025 EPS target should be enough for the stock to work,” as Medicare Advantage trends are seen largely in line.
On the downside, National Storage Affiliates (NYSE:NSA) and Teradyne are flagged as vulnerable to negative earnings surprises, though the note did not elaborate in detail on the downside cases.
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