Morgan Stanley's 30 Best Stocks to Own for the Next 3 Years

This story has been updated from April 15 with the additional 22 stocks on Morgan Stanley's list.

Which stocks are best to own for the long term?

Morgan Stanley's "30 for 2019" list encompasses 30 quality stocks for investors to own for at least three years, the investment firm said in a research note to clients on Thursday. 

As investors wade through "numerous cross-currents" currently affecting the markets, such as slow U.S. economic growth, weakness in key overseas economies, low oil prices and negative policy rates from a growing number of central banks, individual equity opportunities are present, Morgan Stanley said.

The firm asked its U.S. analysts to identify the "highest-quality" companies in each sector that are "likely to strengthen their sustainable competitive advantage."

"We have tried to identify the best franchises, not the most undervalued stocks," Morgan Stanley said. "Our driving principle was to create a list of companies whose business models and market positions would be increasingly differentiated by 2019."

The firm asked its analysts to focus on the ability of a company to sustain its competitive advantage, business model, pricing power, cost efficiency and growth, the note said, among other criteria. Stocks were not required to be rated overweight (Morgan Stanley's equivalent to a buy rating), nor were assumptions about the economic cycle or valuation considerations required.

Here is the full group of stocks from the "30 for 2019" list. We've paired the list with commentary from Jim Cramer if the stock is owned by his Action Alerts PLUS charitable trust portfolio.

 

 

 

Apple
Apple

Morgan Stanley has an overweight rating and a target price of $135 on Apple (AAPL - Get Report) .

Apple's expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 11%, according to Morgan Stanley.

Apple's price-to-earnings multiple based on 2016 EPS is 12.1, Morgan Stanley says.

Apple is a core holding of Jim Cramer's Action Alerts PLUS portfolio.

"Apple has arguably the world's most valuable technology platform with over 1 billion active devices and the potential to deepen its ecosystem and capture more of its users' time in areas such as autos, health, security, home and television. From a financial level, Apple is truly exemplary, generating 40%+ return on equity (ROE) and gross margins (GM) while sitting on over $200 billion of cash and margin debt," according to Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and Jack Mohr, research director of Action Alerts PLUS.

"Its expanding ecosystem includes a $30 billion-a-year services business, new product categories such as its Watch, partnerships such as HealthKit, HomeKit and CarPlay and future opportunities in TV and autos). All of this, combined with its impeccable mobile phone leadership, provides Apple with a path toward double-digit annual sales growth and 15%-20% annual EPS growth long term," they said.

Amazon
Amazon

Morgan Stanley has an overweight rating and a target price of $800 on Amazon.com (AMZN - Get Report) .

Amazon's expected five-year revenue growth rate (based on compound annual growth rate) is 21%. Morgan Stanley said the company's five-year EPS growth rate was "not meaningful."

Amazon's price-to-earnings multiple based on 2016 EPS is 89.4, Morgan Stanley says.

Facebook
Facebook

Morgan Stanley has an overweight rating and a target price of $140 on Facebook (FB - Get Report) .

Facebook's expected five-year revenue growth rate (based on compound annual growth rate) is 32%. Its five-year EPS growth rate (also based on CAGR) is 30%, according to Morgan Stanley.

Facebook's price-to-earnings multiple based on 2016 EPS is 31, Morgan Stanley says.

Facebook is a core holding of Jim Cramer's Action Alerts PLUS portfolio.

"We like Facebook for its 1.5 billion users and combination of top-line and bottom-line growth in the tune of 40% and 30%, respectively," according to Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and Jack Mohr, research director of Action Alerts PLUS.

Visa
Visa

Morgan Stanley has an overweight rating and a target price of $98 on Visa (V - Get Report) .

Visa's expected five-year revenue growth rate (based on compound annual growth rate) is 9%. Its five-year EPS growth rate (also based on CAGR) is 13%, according to Morgan Stanley.

The company's price-to-earnings multiple based on 2016 EPS is 28.2, Morgan Stanley says.

Visa is a core holding of Jim Cramer's Action Alerts PLUS portfolio.

"Visa benefits from secular growth into payments as consumers broadly shift away from cash. We expect future growth to come from the company's recently secured deals with Costco (COST) , USAA and Fidelity, along with continued advancement into e-commerce (as it is embedded within Apple Pay). The acquisition of Visa Europe -- set to close shortly -- should accelerate growth within that region and prove sustainable in the long term," according to Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and Jack Mohr, research director of Action Alerts PLUS.

Alphabet
Alphabet

Morgan Stanley has an overweight rating on Alphabet's (GOOGL - Get Report) , with a target price of $900.

Alphabet's expected five-year revenue growth rate (based on compound annual growth rate) is 17%. Its five-year EPS growth rate (also based on CAGR) is 18%, according to Morgan Stanley.

Alphabet's price-to-earnings multiple based on 2016 EPS is 21.1, Morgan Stanley says.

Alphabet is a core holding of Jim Cramer's Action Alerts PLUS portfolio.

"We believe the market is discounting its seven-pronged growth drivers (seven businesses boast over 1 billion users); its double digit earnings and growth algorithm is accompanied by high FCF (free cash flow) generation and operational discipline," according to Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and Jack Mohr, research director of Action Alerts PLUS.

T-Mobile US
T-Mobile US

Morgan Stanley has an overweight rating and a target price of $47 on T-Mobile US (TMUS - Get Report) .

T-Mobile's expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 28%, according to Morgan Stanley.

T-Mobile's price-to-earnings multiple based on 2016 EPS is 53.5, Morgan Stanley says.

ServiceMaster Global
ServiceMaster Global

Morgan Stanley has an overweight rating on ServiceMaster Global (SERV) , with a target price of $49.

ServiceMaster's expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 18%, according to Morgan Stanley.

ServiceMaster's price-to-earnings multiple based on 2016 EPS is 18.2, Morgan Stanley says.

 

Constellation Brands
Constellation Brands

Morgan Stanley has an overweight rating and a target price of $184 on Constellation Brands (STZ - Get Report) .

Constellation's expected five-year revenue growth rate (based on compound annual growth rate) is 9%. Its five-year EPS growth rate (also based on CAGR) is 16%, according to Morgan Stanley.

Constellation's price-to-earnings multiple based on 2016 EPS is 24.7, Morgan Stanley says.

WhiteWave Foods
WhiteWave Foods

Morgan Stanley has an overweight rating on WhiteWave Foods (WWAV)  , with a target price of $45.

WhiteWave's expected five-year revenue growth rate (based on compound annual growth rate) is 9%. Its five-year EPS growth rate (also based on CAGR) is 16%, according to Morgan Stanley.

WhiteWave's price-to-earnings multiple based on 2016 EPS is 28.6, Morgan Stanley says.

WhiteWave is a stock owned by Jim Cramer's Action Alerts PLUS portfolio.

"We continue to like WWAV for the long term as we see upside in its robust innovation pipeline and growth opportunities within the consumer packaged-foods space -- a truly unique asset," Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and Jack Mohr, research director of Action Alerts PLUS, wrote in their most recent weekly roundup. "We believe WWAV's products continue to resonate with customers as the healthy and organic food trends remain strong."

First Republic Bank
First Republic Bank

Morgan Stanley has an overweight rating on First Republic Bank (FRC - Get Report) ,  with a target price of $75.

First Republic's expected five-year revenue growth rate (based on compound annual growth rate) is 16%. Its five-year EPS growth rate (also based on CAGR) is 15%, according to Morgan Stanley.

First Republic's price-to-earnings multiple based on 2016 EPS is 17.7, Morgan Stanley says.

Nike
Nike

Morgan Stanley has an overweight rating on Nike (NKE - Get Report) , with a target price of $69.

Nike's expected five-year revenue growth rate (based on compound annual growth rate) is 9%. Its five-year EPS growth rate (also based on CAGR) is 15%, according to Morgan Stanley.

Nike price-to-earnings multiple based on 2016 EPS is 24, Morgan Stanley says.

Accenture
Accenture

Morgan Stanley has an equal weight rating and a target price of $111 on Accenture (ACN - Get Report) .

Accenture's expected five-year revenue growth rate (based on compound annual growth rate) is 5%. Its five-year EPS growth rate (also based on CAGR) is 9%, according to Morgan Stanley.

Accenture's price-to-earnings multiple based on 2016 EPS is 21.1, Morgan Stanley says.

Blackstone
Blackstone

Morgan Stanley has an overweight rating and a target price of $34 on Blackstone Group (BX - Get Report) .

Blackstone's expected five-year revenue growth rate (based on compound annual growth rate) is 4%. Its five-year EPS growth rate (also based on CAGR) is -4%, according to Morgan Stanley.

Blackstone's price-to-earnings multiple based on 2016 EPS is 17.3, Morgan Stanley says.

Comcast
Comcast

Morgan Stanley has an overweight rating and a target price of $68 on Comcast (CMCSA - Get Report) .

Comcast's expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 11%, according to Morgan Stanley.

Comcast's price-to-earnings multiple based on 2016 EPS is 17.5, Morgan Stanley says.

CVS Health
CVS Health

Morgan Stanley has an overweight rating and a target price of $111 on CVS Health (CVS - Get Report) .

CVS' expected five-year revenue growth rate (based on compound annual growth rate) is 9%. Its five-year EPS growth rate (also based on CAGR) is 12%, according to Morgan Stanley.

CVS' price-to-earnings multiple based on 2016 EPS is 17.4, Morgan Stanley says.

Danaher
Danaher

Morgan Stanley has an overweight rating and a target price of $103 on Danaher (DHR - Get Report)  .

Danaher's expected five-year revenue growth rate (based on compound annual growth rate) is 5%. Its five-year EPS growth rate (also based on CAGR) is 10%, according to Morgan Stanley.

Danaher's price-to-earnings multiple based on 2016 EPS is 18.9, Morgan Stanley says.

Dollar General
Dollar General

Morgan Stanley has an overweight rating and a target price of $95 on Dollar General (DG - Get Report) .

Dollar General's expected five-year revenue growth rate (based on compound annual growth rate) is 8%. Its five-year EPS growth rate (also based on CAGR) is 13%, according to Morgan Stanley.

Dollar General's price-to-earnings multiple based on 2016 EPS is 18.1, Morgan Stanley says.

Estee Lauder
Estee Lauder

Morgan Stanley has an overweight rating and a target price of $105 on Estee Lauder (EL - Get Report) .

Estee Lauder's expected five-year revenue growth rate (based on compound annual growth rate) is 4%. Its five-year EPS growth rate (also based on CAGR) is 8%, according to Morgan Stanley.

Estee Lauder's price-to-earnings multiple based on 2016 EPS is 30, Morgan Stanley says.

HCA
HCA

Morgan Stanley has an overweight rating and a target price of $97 on HCA Holdings (HCA - Get Report) .

HCA's expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 12%, according to Morgan Stanley.

HCA's price-to-earnings multiple based on 2016 EPS is 12.3, Morgan Stanley says.

IBM
IBM

Morgan Stanley has an overweight rating and a target price of $168 on International Business Machines (IBM - Get Report) .

IBM's expected five-year revenue growth rate (based on compound annual growth rate) is -3%. Its five-year EPS growth rate (also based on CAGR) is -1%, according to Morgan Stanley.

IBM's price-to-earnings multiple based on 2016 EPS is 11.1, Morgan Stanley says.

JPMorgan Chase
JPMorgan Chase

Morgan Stanley has an overweight rating and a target price of $66 on JPMorgan Chase (JPM - Get Report) .

JPMorgan's expected five-year revenue growth rate (based on compound annual growth rate) is 4%. Its five-year EPS growth rate (also based on CAGR) is 11%, according to Morgan Stanley.

JPMorgan's price-to-earnings multiple based on 2016 EPS is 10.8, Morgan Stanley says.

L Brands
L Brands

Morgan Stanley has an overweight rating and a target price of $107 on L Brands (LB - Get Report) .

L Brands' expected five-year revenue growth rate (based on compound annual growth rate) is 5%. Its five-year EPS growth rate (also based on CAGR) is 9%, according to Morgan Stanley.

L Brands' price-to-earnings multiple based on 2016 EPS is 19.7, Morgan Stanley says.

Mettler-Toledo International
Mettler-Toledo International

Morgan Stanley has an equal weight rating and a target price of $345 on Mettler-Toledo International (MTD - Get Report) .

Mettler-Toledo's expected five-year revenue growth rate (based on compound annual growth rate) is 3%. Its five-year EPS growth rate (also based on CAGR) is 13%, according to Morgan Stanley.

Mettler-Toledo's price-to-earnings multiple based on 2016 EPS is 24.5, Morgan Stanley says.

NextEra Energy
NextEra Energy

Morgan Stanley has an overweight rating and a target price of $146 on NextEra Energy (NEE - Get Report) .

NextEra Energy's expected five-year revenue growth rate (based on compound annual growth rate) is 4%. Its five-year EPS growth rate (also based on CAGR) is 7%, according to Morgan Stanley.

The company's price-to-earnings multiple based on 2016 EPS is 18.5, Morgan Stanley says.

Panera Bread
Panera Bread

Morgan Stanley has an overweight rating and a target price of $250 on Panera Bread (PNRA) .

Panera's expected five-year revenue growth rate (based on compound annual growth rate) is 9%. Its five-year EPS growth rate (also based on CAGR) is 14%, according to Morgan Stanley.

The company's price-to-earnings multiple based on 2016 EPS is 31.5, Morgan Stanley says.

Panera is a core holding of Jim Cramer's Action Alerts PLUS portfolio and a top pick for 2016.

"We expect Panera is at an inflection point in both sales and earnings, and look for the company to grow earnings at a 15%-20% annual clip for at least the next five years. Its high free cash flow generation is being aggressively applied toward share buybacks, which prove further accretive to earnings," according to Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and Jack Mohr, research director of Action Alerts PLUS. "PNRA's 25% ROE, 55% GMs and low leverage are complemented by comparable sales momentum driven by its Panera 2.0 technological initiative."

Philip Morris
Philip Morris

Morgan Stanley has an overweight rating and a target price of $110 on Philip Morris International (PM - Get Report) .

Philip Morris' expected five-year revenue growth rate (based on compound annual growth rate) is 1%. Its five-year EPS growth rate (also based on CAGR) is 4%, according to Morgan Stanley.

The company's price-to-earnings multiple based on 2016 EPS is 22.6, Morgan Stanley says.

Public Storage
Public Storage

Morgan Stanley has an equal weight rating and a target price of $289 on Public Storage (PSA - Get Report) .

Public Storage's expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 9%, according to Morgan Stanley.

The company's price-to-earnings multiple based on 2016 EPS is 27.7, Morgan Stanley says.

Ross Stores
Ross Stores

Morgan Stanley has an overweight rating and a target price of $60 on Ross Stores (ROST - Get Report) .

Ross Stores' expected five-year revenue growth rate (based on compound annual growth rate) is 6%. Its five-year EPS growth rate (also based on CAGR) is 10%, according to Morgan Stanley.

The company's price-to-earnings multiple based on 2016 EPS is 21, Morgan Stanley says.

SBA Communications
SBA Communications

Morgan Stanley has an overweight rating and a target price of $121 on SBA Communications (SBAC - Get Report) .

SBA Communications' expected five-year revenue growth rate (based on compound annual growth rate) is 5%. Morgan Stanley said the company's five-year EPS growth rate was "not meaningful."

The company's price-to-earnings multiple based on 2016 EPS was also deemed "not meaningful," Morgan Stanley says.

Zayo Group
Zayo Group

Morgan Stanley has an overweight rating and a target price of $31 on Zayo Group (ZAYO - Get Report) .

Zayo's expected five-year revenue growth rate (based on compound annual growth rate) is 12%. Morgan Stanley said the company's five-year EPS growth rate was "not meaningful."

Zayo's price-to-earnings multiple based on 2016 EPS is 57.8, Morgan Stanley says.

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