As we approach the final weeks of 3Q25, the stock market remains strong, with the S&P 500 up 10% year-to-date and the NASDAQ up 12.5%. Investors are optimistic about potential rate cuts by the Federal Reserve, which could support the market rally.
Morgan Stanley’s chief US equity strategist, Mike Wilson, expects strong performance from stocks in a Fed cutting environment. The firm is looking for top picks to round out 2025, including Chewy, an online pet supply retailer with a market cap of ~$17.6 billion.
Chewy offers a wide range of pet products and services, including veterinary care and pharmaceuticals. With over 130,000 products available, the company has seen strong revenue growth, with $3.12 billion in revenue in fiscal 1Q25, beating expectations.
Analyst Nathan Feather of Morgan Stanley sees potential for Chewy to continue growing, with a one-year price target of $50, implying an 18% upside. The stock has a Strong Buy consensus rating, with an average price target of $47.68, suggesting a 13% upside potential in the year ahead.
Another top pick from Morgan Stanley is EQT Corporation, a major player in the US natural gas production sector. Established in 1888, EQT is a key player in the gas-rich basins of the Appalachian region. EQT, a major energy company, holds vast land holdings in Pennsylvania, Ohio, and West Virginia, primarily in the Marcellus Shale region. Utilizing advanced drilling techniques, EQT maximizes resources located as deep as 6,000 feet below the surface, resulting in high revenues of $2.56 billion in 2Q25, with a $240 million free cash flow.
In addition to natural gas production, EQT operates extensively in the midstream sector, with infrastructure for gas transportation and storage. Analysts like Morgan Stanley’s Devin McDermott highlight EQT’s strong production capabilities and strategic growth opportunities, projecting a 34% upside potential with a $69 price target.
Nu Holdings, operating in the Brazilian banking sector under Nubank, offers a wide range of financial services to over 122 million customers in Brazil, Mexico, and Colombia. With a market cap of $71 billion, the company reported record quarterly revenue of $3.67 billion and a threefold increase in net income over two years, attracting positive attention from analysts like Jorge Kuri of Morgan Stanley.
Kuri believes Nubank’s innovative technology, growing customer base, and attractive services position it as a top player in Latin America’s banking industry. With an Overweight rating and $18 price target, Kuri predicts a potential one-year gain of 22%. Analyst consensus also leans strongly towards Buy, with an average price target of $17.24 and a current trading price of $14.74 suggesting a 17% upside in the following year. NU stock forecast indicates a potential upside of 15.6% based on 15 analysts’ forecasts. The average price target is $58.88, with a high forecast of $71 and a low forecast of $45. The stock has a consensus rating of Buy and a current price of $50.95. Buyers may expect a positive return.
Investors looking for undervalued stocks can use TipRanks’ Best Stocks to Buy tool. The opinions expressed in the article are solely those of the featured analysts and should be used for informational purposes only. It is crucial to conduct your analysis before making any investment decisions. The disclaimer and disclosure should be thoroughly reviewed before taking any action.
Read more at Yahoo Finance: Morgan Stanley Says These 3 Stocks Are Top Picks for the Rest of 2025