Music, food, delivery: Morgan Stanley names companies resistant to market fluctuations

U.S. stocks, which are now trading at historic highs, may come under pressure as the U.S. economy shows signs of slowing. In these conditions, Morgan Stanley advised to pay attention to companies with financial reserves and stable indicators, which are able to survive the recession and continue to develop.

"Companies with high free cash flow fund themselves and can better withstand any deeper market corrections," Morgan Stanley analysts said in a note quoted by CNBC.

Free cash flow is the money that remains with a company after covering operating expenses and capital expenditures. The business can use this money to expand operations, repay debts and other purposes, the channel explains.

The bank analyzed companies from the Russell 1000 Index, a list of the 1,000 largest U.S. public companies by market capitalization that includes such giants as Apple, Microsoft and Amazon. Morgan Stanley excluded the real estate, finance and utilities sectors and selected businesses that met the following criteria:

- Cash (and liquid assets) to enterprise value (Cash-to-enterprise value) ratio above 5%,

- expected free cash flow growth of more than 10% in each of the next two years,

- an expected return on invested capital above 7.5% in each of the next two years.

Here are some of the companies selected by Morgan Stanley.

Morgan Stanley estimates DoorDash's free cash flow will grow 26.6% this year and 41.5% in 2026. The service's stock is up 54% since the start of 2025. The service's growing cash reserves coincide with strong sales growth, including an increase in subscribers to its premium DashPass service. In the second quarter of 2025, DoorDash's revenue was nearly $3.3 billion - up 25% from a year earlier.

According to the forecast of Ma Stanley, Spotify's free cash flow will grow by 27.6% in 2025 and by 34.3% in 2026. Since the beginning of the year, the company's securities have added more than 55%. The audio streaming platform has been able to accumulate significant free cash flow thanks to revenue growth, which has been supported by an increase in the number of active users in recent quarters. Spotify's revenue in the second quarter of 2025 was 10% higher than a year earlier, according to financial statements.

Analysts at Morgan Stanley estimate that FedEx's free cash flow will grow 31.4% in 2025 and 14.9% in 2026. Despite mixed reporting - while revenue and earnings rose year-over-year and exceeded Wall Street expectations, the outlook for the current quarter was less than what analysts had hoped for - the company's cash reserves have increased as it continues the process of spinning off its Freight division. Shares of the transportation and logistics giant have lost nearly 19% since the beginning of the year.

Morgan Stanley recommendation to bet on such companies sounded after the release of fresh data on possible problems in the U.S. economy. Last week the Bureau of Labor Statistics reported that only 22,000 jobs were created in August - much less than forecasts. In addition, the preliminary annualized revised estimate showed that new jobs for the 12 months ending in March were 911,000 fewer than previously reported.

This article was AI-translated and verified by a human editor