Morgan Stanley prefers quality names in the long run, says bear market not over

By Sam Boughedda 

In Morgan Stanley’s “30 for 2025” note released on Tuesday, its equity strategists stated that the current bear market is not over.

The strategists said the firm expects earnings to drop “well below consensus expectations,” with its base case for 2023 at $195. “We believe this will be followed by a stronger earnings picture in 2024,” they wrote.

“We have also identified potential cyclical and secular drivers of the next bull market in equities, including more accommodative monetary policy as inflation slows,” they added.

“A more stable starting point for consumer balance sheets; pent-up demand in investment/capex and in certain parts of consumer services; a global growth recovery led by economies that have lagged since the pandemic; the re-emergence of positive operating leverage; Artificial Intelligence and its diffusion across sectors; and reshoring.”

Morgan Stanley believes quality outperforms in the long run, and companies in its “30 for 2025” include Alphabet (NASDAQ:), Costco (NASDAQ:), JPMorgan (NYSE:), lululemon athletica (NASDAQ:), Mastercard (ETR:), Microsoft (NASDAQ:), Nike (NYSE:), and Visa (NYSE:), among others.