Morgan Stanley names stocks with more upside in September
Analysts at Morgan Stanley recently named several top stock ideas heading into September. The Wall Street investment bank says stocks like Chewy have plenty more to room. Other overweight-rated names screened by CNBC Pro include: Nu Holdings, Cummins, Perimeter Solutions and Cadence Design Systems. Perimeter Solutions The maker of firefighting foam is a new top pick at the firm, Morgan Stanley says. Analyst Daniel Kutz says Perimeter’s growth is too attractive to ignore. In addition, the stock is defensive in an uncertain macroeconomic environment. “PRM’s unique portfolio is levered to drivers largely uncorrelated with macroeconomic trends, insulating its earnings power from tariff/trade uncertainty and recession risks,” he wrote. The bank says other near term catalysts include the possibility of M & A plus increased wildfire activity. Kutz also raised his price target on the stock to $25 per share from $17 and said the stock’s valuation remains “compelling.” Shares are up 75% this year. Chewy The online pet retailer is firing on all cylinders, according to Morgan Stanley. Analyst Nathan Feather is standing by the 14-year-old, Plantation, Florida-based company as a top pick heading into earnings on September 10. “We see a strong 2Q earnings set-up and are tactically positive given improving pet macro trends, strong alternative data and underestimated upside on expenses,” he wrote. The firm also says the stock, up 23% this year, is too attractive to ignore at current prices. “Overweight CHWY remains our Top Pick with improving [market] share gains, a compelling margin inflection and emerging clinic bull case,” Feather said. Nu Holdings Shares of the Brazilian digital banking company have plenty more room to run, according to analyst Jorge Kuri. “Nubank delivered a strong and clean quarter, with key performance indicators broadly exceeding expectations,” he wrote following the parent company’s earnings report in August. Morgan Stanley says the stock is undervalued and has the chops to outperform in the months ahead. “Our granular, bottom-up model —built by product and by country using detailed unit economics and [total addressable market] assumptions— suggests Nubank could reach a US$100 billion valuation by 2026, up from US$62 billion today,” he said. Kuri also says Nubank has robust unit economics along with impressive technological capabilities. Shares of Cayman Islands-based Nu Holdings are ahead 42% this year, and Morgan Stanley still calls it a top idea. Perimeter Solutions “Despite ~’normal’ macro conditions, PRM continues to exhibit robust earnings growth. … .PRM’s unique portfolio is levered to drivers largely uncorrelated with macroeconomic trends, insulating its earnings power from tariff/ trade uncertainty and recession risks. … .Compelling valuation.” Chewy “We see a strong 2Q earnings set-up and are tactically positive given improving pet macro trends, strong alternative data, and underestimated upside on expenses. … .OW CHWY remains our Top Pick with improving share gains, a compelling margin inflection, and emerging clinic bull case.” Nu Holdings “Nubank delivered a strong quarter, outperforming consensus — especially on credit growth, which we see as the main driver of future earnings upgrades … Our granular, bottom-up model —built by product and by country using detailed unit economics and TAM assumptions — suggests Nubank could reach a US$100 billion valuation by 2026, up from US$62 billion today.” Cummins “With the market pricing in a demand downturn in [heavy duty/medium duty] trucks in 2H25 as severe as the [the 2008 Global Financial Crisis], the mixture of operational self-help & investments in Power Systems bolsters our conviction that the company can continue to outperform.” Cadence Design Systems “The company has a solid base in systems analysis and simulation work in the chip design flow, deep customer relationships, a leading position in analog and mixed-signal design, a solid balance sheet and should enjoy strong structural growth with its new AI-driven [electronic design automation] tools.”
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