In a period marked by economic uncertainty and shifting market dynamics, leading financial institutions continually refine their investment strategies to identify resilient opportunities. Morgan Stanley recently unveiled its top equity selections for September, emphasizing companies positioned for structural growth and those possessing strong defensive characteristics. This analytical approach seeks to pinpoint enterprises with distinct catalysts that can outperform broader market trends, offering investors a strategic allocation in a complex environment.
- Morgan Stanley’s September equity picks focus on structural growth and defensive attributes.
- Five key companies were highlighted for their compelling characteristics and potential.
- Perimeter Solutions, Chewy, and Nu Holdings were noted for strong near-term catalysts.
- Cummins and Cadence Design Systems were also featured for robust fundamentals.
- The selections prioritize businesses less correlated with broader macroeconomic volatility.
Morgan Stanley’s Top Equity Selections for September
Perimeter Solutions (PRM): A Resilient Defensive Play
For Perimeter Solutions (PRM), analyst Daniel Kutz cited the company’s unique portfolio, which he described as largely insulated from tariff, trade, and recession risks. Kutz noted PRM’s ability to maintain earnings stability independently of broader economic trends, raising its price target from $17 to $25 and projecting a potential 75% appreciation by 2025. This assessment underscores PRM’s appeal as a defensive play in a volatile market.
Chewy (CHWY): Capitalizing on Pet Industry Growth
Chewy (CHWY) was identified as a “Top Pick” by analyst Nathan Feather, who highlighted a strong setup for its second-quarter results. Feather pointed to an improving macro environment for the pet industry, robust alternative data, and an underappreciated upside in operational expenses. With an “Overweight” rating, Chewy’s prospects are further bolstered by gains in market share, a positive trajectory in margin improvement, and emerging opportunities in pet clinics. The stock has seen a 23% increase year-to-date, reflecting its strong performance.
Nu Holdings (NU): Exceeding Expectations in Credit Growth
Regarding Nu Holdings (NU), Jorge Kuri emphasized a solid quarter, with performance exceeding consensus expectations, particularly in credit growth—a critical driver for future upward revisions. Kuri’s granular model, which incorporates unit economics and total addressable market (TAM) assumptions by product and country, suggests that Nubank could achieve a valuation of $100 billion by 2026, a substantial increase from its current $62 billion. Analysts project a potential 42% increase in its stock by 2025.
Strategic Convictions: Cummins (CMI) and Cadence Design Systems (CDNS)
Morgan Stanley also expressed conviction in Cummins (CMI), noting that the market’s current discounting of a heavy/medium-duty demand decline in the second half of 2025 mirrors the severity of 2008. The firm highlighted Cummins’ operational self-help initiatives and strategic investments in its Power Systems segment as key factors reinforcing its positive outlook. Similarly, Cadence Design Systems (CDNS) was recognized for its strong foundation in analysis and simulation, deep client relationships, leadership in analog and mixed-signal design, robust balance sheet, and structural growth driven by new AI-powered Electronic Design Automation (EDA) tools. These selections collectively signal an investment philosophy that prioritizes companies with resilient business models and clear pathways to value creation, even amidst broader market pressures.
Lucas turns raw market data into actionable strategies, spotting trends in a heartbeat. With 9 years managing portfolios, he treats market volatility like a surfer riding big waves—balance and timing are everything. On weekends, Lucas hosts “Bull & Bear Banter” podcasts, showing that finance discussions can be as entertaining as they are informative.