nyse

  • Morgan Stanley is expecting a strong third-quarter earnings season.
  • The firm has picked 10 stocks that it expects to soar as companies report their results.
  • “Our analysts believe that one or more imminent events will drive the share price materially over the next 15-60 days,” the bank said. 

Morgan Stanley is expecting a strong earnings season and has named 10 stocks that it believes are set to soar. For each of these stocks, the bank anticipates a near-term event to drive shares higher.

“Our analysts believe that one or more imminent events will drive the share price materially over the next 15-60 days,” the report said. 

Michael Wilson, the bank’s chief US equity strategist, expects S&P 500 earnings will show growth of 19% during the reporting period. “Strong topline growth is also expected in 3Q, with consensus estimating S&P 500 sales to grow 7.2%,” he wrote in a note sent to clients on Tuesday.

Financials are expected to be the biggest contributor to earnings growth at the index level, up 5.3%. Energy and tech are also projected to contribute substantially. This quarter marks the first earnings season for the newly formed GICS Communication Services sectorwhich is dominated by Google and Facebook. It is expected to contribute 1.7% earning growth at the index level.

Below are the 10 stocks that Morgan Stanley says are poised to soar in the next two months.

Anthem

Ticker: ANTM

Industry: Healthcare

Price target: $368

Current price: $276.96

“We see tailwinds into 3Q including (1)Group MA which the company expects to more double by year end; (2) Government margin (3) Easy commercial margin company on y/y basis; and (4) Exchanges were a headwind in 2017,” the report said.

Source: Morgan Stanley

AT&T

Ticker: T

Industry: Telecom Services

Price target: $37

Current price: $33.77

“The 3Q18 will be the first full quarter since the close of the Time Warner acquisition, which should provide more clarity on the new AT&T,” according to the Morgan Stanley.

Source: Morgan Stanley

Diamondback Energy

Ticker: FANG

Industry: Energy/utilities

Price target: $168

Current price: $133.27

“Energen’s recent well performance has been prolific, with continued strength likely improving investor sentiment around the acquisition. FANG could provide an update on the process to monetize its midstream assets through Rattler Midstream Partners LP,” the report said.

Source: Morgan Stanley

See the rest of the story at Business Insider