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3. RenaissanceRe Holdings ( RNR)

Company Profile: RenaissanceRe is a provider of reinsurance and insurance coverage.

Current Share Price: $69.31 (May 11)

Potential Upside: 26% based on a price target of $87

Morgan Stanley's Take: Analyst Gregory Locraft writes that RenaissaneRe's revenue growth should accelerate, as first-quarter results were dominated by losses from the Japan earthquake and tsunami, the New Zealand earthquake and Australian floods.

Locraft raised his 2012 and 2013 earnings estimates to reflect revenue growth and improving margins, even as he doubled his 2012 catastrophe budget "to more accurately reflect the potential for higher catastrophe losses in line with rising long-term averages."


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 second-quarter production guidance and that supply issues are being solved faster than new ones are arising," Jonas wrote.

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