A number of shares are poised to rally as corporations proceed reporting third-quarter earnings over the following few weeks, in keeping with Morgan Stanley. Large banks and others which have thus far reported outcomes largely booked better-than-expected income and earnings-per-share for the three months ended September 30. For the reason that earnings season acquired underway, greater than 80% of corporations which have thus far reported have crushed Wall Avenue’s estimates, FactSet information reveals. “The dearth of downward earnings revisions within the run-up into 3Q earnings suggests corporations are already snug they’ll meet or beat expectations,” Morgan Stanley analysts led by Michelle Weaver wrote Tuesday in a observe to shoppers. “Apparently, stock-specific threat has risen sharply and sits at its highest stage since 2020, suggesting a great setting for stock-picking as we enter the height of the reporting season,” the analysts added. Morgan Stanley highlighted a number of shares that would see sharp positive aspects as earnings season ramps up. Its prime picks are in a variety of industries, from software program to social media to airways. Listed below are three of Morgan Stanley’s prime picks: Atlassian The software program firm’s inventory is prone to rise amid rising demand for its app improvement instruments, in keeping with Morgan Stanley. As well as, Atlassian introduced final month its shift to the cloud by 2029 — a transfer that ought to enhance the agency’s capacity to monetize its increasing resolution set, the financial institution’s analysts mentioned. Morgan Stanley has an chubby ranking on Atlassian and a value goal of $320 per share. Atlassian is down greater than 14% over the previous three months. Shares have fallen roughly 31% for the reason that starting of this 12 months. Meta Platforms The social media firm’s shares have room to run due to development in its consumer engagement and promoting enterprise , in keeping with the Morgan Stanley analysts. Meta can also be prone to develop because it integrates a number of Graphics Processing Unit-enabled enhancements into its household of apps, together with Instagram. Morgan Stanley has an chubby ranking on Meta and a $850 value goal on its shares. The WhatsApp father or mother has risen about 25% in 2025. Southwest Airways Southwest’s shares have a number of room to run because the airline continues to overtake its enterprise and as Wall Avenue continues to sleep on the inventory. “Regardless of/due to the inventory efficiency, investor sentiment stays tactically cautious which might push the inventory even larger within the occasion of a beat + robust name/information,” the funding financial institution’s analysts wrote of their observe. Since September 2024, Southwest has undertaken efforts to enhance its operational efficiencies by decreasing flip instances and introducing red-eye flights to extend plane utilization, along with implementing a number of value slicing measures . Morgan Stanley’s value goal for the airline inventory is $38 per share. Southwest Airways shares have risen nearly 15% over the previous 12 months.
