Morgan Stanley: These 10 stocks in April are expected to deliver surprise profits

Investing.com—Morgan Stanley is highlighting a group of U.S. and European stocks with the strongest potential for earnings surprises in the upcoming earnings season. The firm uses a quantitative framework that combines analyst ratings with forward-looking signals.

Upgrade to InvestingPro to get more exclusive analyst insights

The firm’s approach combines indicators such as its earnings forecast landscape, earnings quality, and broader forecast dynamics to build what it calls the earnings surprise composite. Its goal is to identify companies most likely to beat expectations during earnings season.

Morgan Stanley says the strategy has delivered solid results. Since 2024, it has produced a pre-tax Sharpe ratio of 1.06 in the U.S. market and 0.92 in Europe. Over a longer period, including the first five years since launch, the strategy’s Sharpe ratio is 0.69 in the U.S. market and 0.71 in Europe.

In the U.S. market, the firm’s preferred stocks include Western Digital, Citigroup, and RTX—all of which have received an “Overweight” rating and rank near the top in the earnings surprise composite. The longer list also includes companies such as Apple, eBay, ConocoPhillips, and Roblox.

In the European market, ArcelorMittal stands out with the highest percentile score, followed by Barclays, ASML, Nokia, Santander, ASM International, and Finnair. All of these companies have also been rated as “Overweight” by Morgan Stanley.

The report notes that combining quantitative signals with fundamental analyst views can help investors better navigate earnings-driven volatility, especially in an environment where company performance differentiation remains relatively significant.

This article was translated with the assistance of AI. For more information, please refer to our Terms of Use.