Analysts at Morgan Stanley have named a slate of stocks to buy as March gets underway. The firm said investors should bet on the market’s momentum by scooping up shares of undervalued companies. CNBC Pro combed through top Morgan Stanley research to find the bank’s favorite picks. The firm is overweight on the names listed below. They include HashiCorp , Rivian Automotive , Dell Technologies, Sun Country Airlines and Huntington Bancshares. Sun Country Airlines The discount airline is firing on all cylinders, according to the firm. Analyst Ravi Shanker upgraded the stock to overweight from equal weight earlier this week, adding that he sees a slew of positive catalysts on the horizon. “We like SNCY’s unique business model and believe its three segments make it the most defensive Ultra Low Cost Carrier,” he said. Those segments include its position as a low-cost carrier for passengers, as well as serving as a charter airline. The company also has a cargo partnership with Amazon. “We continue to be impressed by SNCY’s flexibility and management’s solid execution, consistently delivering on numbers, operational reliability, and cost control, Shanker said. The stock is down 26% over the last 12 months, but the firm said investors should buy the dip. “Alongside the upgrade to Overweight, SNCY is now our preferred Ultra-Low Cost Carrier,” the analyst added. HashiCorp Analyst Sanjit Singh upgraded the cloud-computing infrastructure company to overweight from equal weight earlier this week. The firm said a “cloud resurgence” is here, and HashiCorp is a likely beneficiary. Singh said that cloud demand is picking up steam. “The resumption in cloud migration initiatives bodes well for HashiCorp as it plays a central role in helping accelerate and secure the delivery of cloud apps,” he said. Singh called the demand an “impending re-acceleration.” Shares are up nearly 10% in 2024, but they are still worth buying, according to the analyst. “With an inflection in growth on the horizon coupled with an attractive valuation, we upgrade shares to OW and raise our PT from $23 to $30…” he said. Rivian Automotive Analyst Adam Jonas is not giving up on shares of Rivian — and neither should investors, he said after the electric-vehicle maker’s latest quarterly report. Jonas admitted Rivian needs a strategy change, but he thinks a turnaround is on the horizon. “Rivian is finally entering the ‘crisis’ mode so frequently required to effect real change in this industry,” he said. Jonas listed three areas the company should address, which include “costs, capital discipline and collaboration.” Rivian has an “authentic brand, compelling product design, internally developed electrical architecture and operating system,” the analyst added. The stock is down more than 50% in 2024, and Jonas has cut his price target to $14 per share from $24. But he still thinks investors should buy the stock. “Beyond valuation, we remain Overweight because we see Rivian as a ‘re-launched’ company in 2024 with self-help potential and possible strategic value,” he wrote. Dell “Our prior bull case becomes our new base case, as AI server orders/backlog/pipeline are tracking well ahead of our prior expectations, and directionally closer to our bullish supply chain checks. Margins will bear watching, but we believe FY25 guidance is still conservative. … DELL screens as one of the most undervalued AI-exposed names in our global hardware and semi universe.” Sun Country Airlines “We like SNCY’s unique business model and believe its three segments makes it the most defensive Ultra Low Cost Carrier. … We continue to be impressed by SNCY’s flexibility and management’s solid execution, consistently delivering on numbers, operational reliability, and cost control. … Alongside the upgrade to Overweight, SNCY is now our preferred Ultra-Low Cost Carrier.” HashiCorp “A cloud resurgence starts to benefit Hashi. … The resumption in cloud migration initiatives bodes well for HashiCorp as it plays a central role in helping accelerate and secure the delivery of cloud apps. … With an inflection in growth on the horizon coupled with an attractive valuation, we upgrade shares to OW and raise our PT from $23 to $30. … Early Indicators Point to Impending Re-Acceleration.” Rivian “We identify 3 critical areas of execution: Costs, Capital Discipline and Collaboration. Rivian is finally entering the ‘crisis’ mode so frequently required to effect real change in this industry … In our view, Rivian’s greatest strengths lie in its authentic brand, compelling product design, internally developed electrical architecture and operating system. … Beyond valuation we remain Overweight because we see Rivian as a ‘re-launched’ company in 2024 with self-help potential and possible strategic value.” Huntington Bancshares “While it’s hard to avoid CRE exposure in the group we cover, higher levels of capital and liquidity and strong deposit franchises can mitigate some of this risk and even drive upside as the market gains more confidence that CRE related losses will play out over time rather than result in a near-term spike. … For investors looking to minimize exposure to CRE, we note that HBAN has the least CRE … exposure in the group, coupled with the highest level of CRE reserves. We make HBAN our new Top Pick.
