Morgan Stanley says stocks like Warner Music are a table-pounding buy right now

Morgan Stanley said this week that stocks including SpaceX, SiTime and EchoStar are attractive.

Skip NavigationJoin ICJoin ProLivestreamMenuAnalysts at Morgan Stanley named several stocks that the bank said are attractive right now. The Wall Street investment bank said that investors should take advantage of the situation and buy any weakness in companies, including SpaceX. Other stocks rated overweight by Morgan Stanley and screened by CNBC Pro include: Darden Restaurants , SiTime , Warner Music Group and EchoStar. Darden Restaurants Buy the weakness ahead of the company’s earnings report on Sept. 24, analyst Brian Harbour said of the owner of chains such as Olive Garden. “We see a beat for [LongHorn Steakhouse] and perhaps a miss for OG, though broader casual dining demand still seems solid, as consumer concerns have clearly picked up again,” he wrote. Morgan Stanley also raised its per-share price target to $255 from $236. Harbour said investors should be mindful of the effects of fuel prices and rising inflation, but the stock remains compelling regardless. “Best-in-class casual dining operator with strong brand portfolio,” he said. The stock is down close to 5% over the past month. EchoStar Analyst Sean Diffley assumed research coverage of the satellite stock earlier this week and said EchoStar is compelling, especially given its stake in SpaceX. “We concluded that the discount is too wide to ignore and there are too many call options to sit on the sidelines, especially if one has a positive view on both SPCX and spectrum, as we do,” he wrote. In addition, Diffley, who has a price target of $134 on EchoStar, sees the potential for other positive catalysts, such as buybacks. “We see ECHO shares as an attractive entry point to get access to SPCX at a discount and as one of the few publicly traded ways to play spectrum, which we view as a scarce and appreciating asset class,” he said. The stock is down almost 15% this year. Read more. Warner Music Warner Music was recently named a new top pick at Morgan Stanley, according to analyst Cameron Mansson-Perrone. The bank said in a recent note that investors are underappreciating the value of Warner’s music library. “Catalog value alone may represent > $30 per share of value within Warner Music shares, suggesting upside at current levels despite attributing nothing to frontline,” he wrote. Warner Music shares are down more than 9% this year, but Mansson-Perrone said growth fears are overdone. “We see [overweight rated] WMG shares as offering attractive end-market exposure through a market leader that has been simultaneously taking share and expanding margins,” he said. SiTime “Timing provides the clock signals that tell electronic systems when to process and move data. SiTime operates as a pure-play in the precision timing portion of the market, where greater accuracy and stability are required for more demanding applications.” SpaceX “We reiterate our OW on SpaceX’s potential to drive improvement in intelligence-per-watt-per-dollar-per-second … However, for investors who want resilient exposure to the long-term trade while mitigating some of the nearer-term volatility, we believe SpaceX may continue to exhibit greater stability vs. other its peers in an AI portfolio.” Darden Restaurants “We see a beat for [Longhorn Steakhouse] and perhaps a miss for OG, though broader casual dining demand still seems solid, as consumer concerns have clearly picked up again … Best-in-class casual dining operator with strong brand portfolio.” EchoStar “We concluded that the discount is too wide to ignore and there are too many call options to sit on the sidelines, especially if one has a positive view on both SPCX and spectrum, as we do … We see ECHO shares as an attractive entry point to get access to SPCX at a discount and as one of the few publicly traded ways to play spectrum, which we view as a scarce and appreciating asset class.” Warner Music “Catalog value alone may represent > $30 per share of value within Warner Music shares, suggesting upside at current levels despite attributing nothing to frontline. … .We see OW WMG shares as offering attractive end-market exposure through a market leader that has been simultaneously taking share & expanding margins.”Read More

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