As we step into 2024, investors are adjusting to the realization that the Federal Reserve’s triumph over inflation may not be as imminent as previously anticipated. The last few weeks of 2024 have seen this shift in expectation.
Economic growth is also predicted to be subdued this year. A report from Argus Research highlights that the peak growth of the US economy was witnessed in the third quarter of 2023, with a significant slowdown expected in the first half of 2024.
This is primarily attributed to the decrease in US household savings accumulated during the pandemic, which had bolstered the economy in 2023 despite challenging conditions.
Nevertheless, there is an expectation of stock market growth and earnings expansion in 2024.
Morgan Stanley’s Strategic Stock Selections
Morgan Stanley, in its Equity Sales Global Thoughts, Themes, and Ideas report published in December, highlighted a list of potential stock buys for 2024.
We will look at some of these stocks below.
Lazard Inc (NYSE:LAZ): Lazard Inc is noted for its financial advisory and asset management services.
Wolfe Research upgraded the company’s rating earlier this month. Insider Monkey data shows that 11 hedge funds had stakes in Lazard as of the third quarter of 2023.
Varonis Systems Inc (NASDAQ:VRNS): Varonis Systems, a security software company, is highlighted for its significant upside potential.
Susquehanna’s December bullish rating on the stock reflects a positive outlook for cybersecurity sector spending.
Seagate Technology Holdings PLC (NASDAQ:STX): Seagate Technology Holdings is noted by BMO Capital for its placement in a list of tech stocks with high growth at a reasonable price.
“Our analysis suggests that the sector outperforms about 80% of the time in the year following similar two-year performance levels,” BMO Capital stated regarding tech stock performance trends.
L3Harris Technologies Inc (NYSE:LHX): L3Harris Technologies, an aerospace and defense company, has been recognized for a substantial potential upside in 2024 by Morgan Stanley.
Diamond Hill Mid Cap Strategy commented on the company’s prospects, noting, “We anticipate the US’s defense budget will be better than expected over the next few years…We accordingly capitalized on a recent share-price decline to initiate a position at what we consider a compelling valuation.”
Discover Financial Services (NYSE:DFS): Discover Financial Services is recommended for its potential upside.
Despite a value drop over the past year, its dividend yield and revenue growth remain notable.
NU Holdings Ltd (NYSE:NU): NU Holdings is praised for its market opportunity, business model, and management team.
White Falcon Capital Management elaborated on their investment in Nu Holdings in their fourth-quarter 2023 investor letter, highlighting the company’s significant market presence in Latin America.
Devon Energy Corp (NYSE:DVN): Devon Energy Corp is recognized for its high upside potential.
BMO Capital included it in a list of January 2024 laggards expected to outperform for the remainder of the year.
Biogen Inc (NASDAQ:BIIB): Biogen Inc is favored for its substantial upside.
Baird’s bullish outlook on the biotech sector and the potential rate cuts in 2024 reinforce the positive prospects for Biogen and similar companies.
Morgan Stanley’s Investment Strategy: A Focus on Growth and Stability
This analysis showcases Morgan Stanley’s strategic approach to stock selection, focusing on companies with strong growth potential and favorable market positions.
These insights offer investors valuable guidance for making informed decisions in the evolving financial landscape of 2024.
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