8. Union Pacific ( UNP) Company Profile: Union Pacific operates the Union Pacific Railroad Co., offering freight transportation to 23 states in the U.S. Current Share Price: $103.97 (May 11) Potential Upside: 8% based on a price target of $112 Morgan Stanley's Take: Though Union Pacific missed consensus estimates for the first quarter due to fuel price lag impact and weather disruptions, the result was consistent with Morgan Stanley analyst William Greene's expectations heading into the quarter. Based on several positives through the end of 2011, including reaccelerating pricing, a reversal of the fuel surcharge impact, improving margins and a commitment by management to repurchase shares and raise the dividend, Greene says Union Pacific shares currently offer an attractive entry point for his longer-term thesis.
6. CBS Corp. ( CBS) Company Profile: CBS is a mass-media company with operations in entertainment, cable networks, publishing and local broadcasting. Among the assets owned by CBS are Simon & Schuster, Showtime Networks, CBS Television Studios, CNET Networks and CBS Radio. Current Share Price: $27.30 (May 11) Potential Upside: 14% based on a price target of $31 Morgan Stanley's Take: Analyst Benjamin Swinburne raised estimates and the price target on CBS after the media company topped first-quarter estimates. Swinburne says CBS is benefitting from cost discipline, strength in advertising and finding new ways to make money off existing content. CBS is also transforming its business toward greater recurring subscription and license fees, Swinburne writes.
4. Honeywell ( HON) Company Profile: Honeywell is a conglomerate that makes security technologies, automotive products and chemicals. Current Share Price: $61.40 (May 11) Potential Upside: 22% based on a price target of $75 Morgan Stanley's Take: Analyst Scott Davis trumpets Honeywell's safety-products business, noting that personal protection equipment (PPE) is a $20 billion industry growing at twice the rate of gross domestic product. "The business is just 6% of Honeywell's overall sales but is growing fast," Davis writes. "With about 10% market share, Honeywell is the leader along with 3M ( MMM), but the industry is still fragmented and could offer plenty of room for growth via acquisitions," Davis adds.
2. Ford ( F) Company Profile: Ford is the U.S.-based producer of cars and trucks including the F-150 pickup, Mustang sports car and Taurus family sedan. Current Share Price: $15.12 (May 11) Potential Upside: 39% based on a price target of $21 Morgan Stanley's Take: Analyst Adam Jonas says Ford's first-quarter results were as important a barometer of its revival as anything over the past two years, during which time the carmaker's stock jumped 160%. "Despite facing a quarter with gas prices up nearly 20% and continued launch efforts for the Focus and Explorer ramp-up, the company beat consensus by 30% with strong earnings quality," Jonas wrote. Among the themes Jonas pulled from Ford's first-quarter numbers, he notes the carmaker's net pricing improved even before the supply crunch resulting from the Japan earthquake. "Ford says it is 'scrambling' to make good on