Earnings season is almost over. Morgan Stanley has some picks to play the end
First-quarter earnings season might be nearing its end, but Morgan Stanley believes there are still stocks worth playing for a post-results boost. Approximately 78% of the S & P 500 — or 394 companies in the index — have reported earnings so far. Of those, nearly 85% have posted earnings that have surprised to the upside, while 78% have posted revenues above Wall Street expectations. But Morgan Stanley sees potential in some stocks that have yet to report. In a Wednesday note, the bank shared a basket of stocks from the MSCI U.S. index that are expected to report earnings between May 7 and June 2, are rated overweight by Morgan Stanley’s equity analysts and fall within the top two quintiles of what it calls an Earnings Surprise Composite score. Some stocks from the basket are shown below: Ulta Beauty is expected to report earnings on Monday, June 1. Bank of America upgraded the beauty retailer to a buy rating from neutral on Tuesday. Analyst Lorraine Hutchinson believes Ulta is more attractive after a pullback, especially as the retailer could be poised profit from some recent investments. Shares of Ulta are down 12% on the year and 24% in the past three months. The stock fell after the company told investors in March that it had spent $434 million to renovate and open new stores, improve information technology systems, expand its Wellness by Ulta retail space and expand internationally. “ULTA is using [its recent investments] to build a flywheel to drive growth instead of just running on a treadmill to keep up,” Hutchinson wrote. “The pullback has brought elevated investor expectations down to earth in our view, creating an opportunity to invest in a high quality compounder at a discount to peers.” The analyst’s $685 price target offers upside of 29% from where shares closed Tuesday. Retail giant Target reports earnings on Tuesday, May 19. Shares have rebounded 32% this year after plunging between 2022 and 2025. In a Tuesday note to clients, Citigroup stood by its neutral rating on Target, but raised its target price to $133 from $117, catching up with where the stock was already trading. “Sentiment has become much more positive on TGT since the last earnings call and the stock is +16% over the last 3 mos vs the [group] median -9%. Although we expect positive results and tone, the bar is unusually high, and if they don’t raise it could be viewed as disappointing,” wrote Citi analyst Paul Lejuez. Chip equipment manufacturer Applied Materials is due to report results on Wednesday, May 13. In a Monday note, Morgan Stanley analyst Shane Brett stood by his overweight rating on AMAT. “Expectations are not low for AMAT, but we think AMAT keeps pace with peers with another strong beat & raise,” the analyst wrote. “We saw the JanQ print as a leap in the right direction; we think this print will be another leap.” Brett’s revised price target of $454, lifted from $432, offers future upside of nearly 11%. Shares have already surged 66% this year. Two other names on Morgan Stanley’s list include Nvidia and Deere & Co .
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