Three stocks on the rise: Morgan Stanley names the best investments for the rest of the reporting season

As the U.S. quarterly reporting season ramps up, investment bank Morgan Stanley has singled out several companies that have yet to report whose stocks could soar once financial results are revealed. Its top investment ideas range from airlines to software, CNBC reports.

The TV station named three stocks that the bank considers to be "top picks."

Wall Street undervalues shares of the American airline Southwest Airlines (the report will be published on October 23), although it is restructuring the business: reducing the time of aircraft maintenance, introducing night flights for a fuller utilization of the fleet and reducing costs, according to Morgan Stanley. Southwest Airlines shares have risen nearly 13% over the past year. "Despite - or perhaps because of - the stock's momentum, investors remain tactically cautious. This could push quotes even higher if the company delivers a strong report and positive outlook," CNBC quoted a note from analysts at the investment bank. Morgan Stanley's target price for Southwest Airlines shares is $38 per paper, 15% above the average Wall Street target and 10% above the current value.

According to Morgan Stanley analysts, Meta Platforms shares (reported on October 29) have upside potential due to increased user engagement and expansion of the advertising business. The introduction of new artificial intelligence-based features in Instagram and other applications should also support the quotes. Shares of parent company Facebook, Instagram and WhatsApp add about 25% in 2025. Morgan Stanley's target price on Meta's stock is $850, 2% lower than analysts' average, but still 16% higher than the current price target.

Shares of software developer Atlassian (report on October 30) may grow amid growing demand for its tools for creating applications, Morgan Stanley forecasts. In addition, in September Atlassian announced a move to the cloud by 2029 - this, according to the bank's analysts, will improve product monetization. Atlassian shares have fallen 31% since the beginning of this year. Morgan Stanley recommends them to buy (Overweight rating) with a target price of $320 - 28% above the Wall Street target and almost 90% above the current level.

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