15 stocks expected to see meaningful catalysts this earnings season – MS

Morgan Stanley strategists highlighted 15 stocks for which they expect to see meaningful near-term catalysts reflected in their upcoming earnings and onwards.

According to Morgan Stanley's U.S. Thematic and Equity strategists, headed by Michelle M. Weaver, consensus estimates imply the second quarter EPS for the S&P 500 (SP500) to grow 5% year-over-year, with sales at more than 4% YoY.

“But the growth is expected to be top-heavy – Street estimates have Mag 7 (MAGS) net income growth at 14% YoY for 2Q, vs. -3% for the S&P 493,” she said. “Given the downward EPS revisions we saw in April/May and the subsequent recovery in earnings revisions breadth from -25% to ~1%, we expect the index to deliver 2Q beat rates roughly in line with historical averages (4-5%).”

Morgan Stanley sees 13 stocks moving positively this season:

• argenx SE (ARGX) – “We see the ARGX pipeline as undervalued given much of the focus for investors has been on quarterly growth for Vyvgart’s commercialization in myasthenia gravis and chronic inflammatory demyelinating polyneuropathy.” Price target: $700.
• Atlassian (TEAM) – “We remain confident in Atlassian's ability to deliver sustained 20%+ topline growth and modest margin expansion in coming years.” Price target: $320.
• Chewy (CHWY) – “With the company's efforts on marketing, experience, and assortment delivering consistent gains, we expect revenue to be in-line or above 1Q levels.” Price target: $50.
• CVS Health (CVS) – “CVS is likely a share gainer amid ongoing competitor store closures, where our analysis shows CVS store traffic significantly outpacing peers. Meanwhile, its Pharmacy Benefit Management business, should benefit going forward from new GLP-1 deals and business wins.” Price target: $80.
• DraftKrings (DKNG) – “We expect 2Q will likely be the first quarter of hold tailwinds in a while, with DKNG's actual hold rate moving above structural and provide the company the ability to offset most of the tax (NJ/LA taxes) and regulatory headwinds (Investment with MO launch in Dec) that occurred during the quarter.” Price target: 52.
• Eaton (ETN) – “We see ETN attractively positioned into Q2 EPS w/ upside driven by Electrical Americas margins – modeled down ~70 bps Q/Q vs typical +180 bps ramp.” Price target: $375.
• Eli Lilly & Co. (LLY) – “For 2Q25, we model revenue/EPS of $15.2B/$5.92 vs. cons $14.6B/$5.56, with Mounjaro+Zepbound contributing $8.2B combined and a magnitude of 2Q beat will dictate how LLY handles 2025 revenue guide, but we expect a raise of the low end at a minimum.” Price target: $1,135.
• F5 (FFIV) – “Our checks on F5 have been uniformly positive as resellers saw incremental spending on multi-cloud and load balancing products as customers prioritize data center modernization projects.” Price target: $305.
• Nvidia (NVDA) – “End demand remains very strong, and we expect Nvidia to continue to deliver upside on the supply side, as rack-scale product shipments continue to accelerate.” Price target: $170.
• Omada Health (OMDA) – “Omada is seeing an acceleration in growth, which combined with the benefits of technology/Gen AI tools and increasing traction for multi-condition sales, is beginning to drive significant operating leverage.” Price target: $25.
• Southwest Airlines (LUV) – “Investor positioning remains relatively cautious and if management can surprise to the upside by sticking to the internal initiatives guidance (which is nowhere near being priced into the stock or in sell-side consensus) and validating that bag-fee rollout did not have a consumer fallout (still high NPS scores, maybe?) this could drive another strong run in the stock.” Price target: $38.
• Valley National Bancorp (VLY) – “We expect to see 3% Q/Q net interest income growth driven by NIM improvement and solid loan growth; and sequential declines in both provision and loan losses.” Price target: $11.
• Western Digital (WDC) – “We particularly believe that the market is still under-appreciating the gross margin expansion story that WDC can deliver in the next several quarters.” Price target: $85.

…And 2 stocks moving negatively:

• National Storage Affiliates Trust (NSA) – “We expect continued pressure on NSA shares into the print as our MSe 25eFFO of $2.28 stays -1.7% below consensus and 2.6% below company guidance.” Price target: $30.
• Teradyne (TER) – “Our CY26 revenue/EPS forecast is 7%/14% below street and we expect street to converge to MSe over time. We expect our thesis to be realized as early as JunQ earnings, with street estimates modeling for 18% h/h growth, implying 1H mix of 44% vs 49% historically (since 2017), compared to MSe of 12% (1H mix of 47%).” Price target: $74.