Morgan Stanley is out with its latest "Best Ideas" list for North America.
Apple, which reported monster quarterly earnings on Tuesday with 74.4 million iPhones sold in the fourth quarter, is one of the nine on this list.
The analysts identified stocks that required out-of-consensus analysis, offered a favorable risk-reward profile, and displayed a clear path to growth.
Amazon
Ticker: AMZN
2015 EPS: $3.52
2015 Price to Earnings: 88.2
Price Target: $420
Comment:"Near term, the recent earnings reset and related pullback in investments – along with low institutional ownership – provide an attractive set-up with AMZN at 52-week lows,” wrote Morgan Stanley’s Katy Huberty.
Apple
Ticker: AAPL
2015 EPS: $7.89
2015 Price to Earnings: 14.2
Price Target: $126
Comment:"Apple shares do not price in upcoming hardware, software, and services innovations, in our view," wrote Morgan Stanley's Katy Huberty. "We expect iPhone share gains and growth re-acceleration driven by larger-screen iPhones based on our AlphaWise surveys and supply chain checks."
Canadian Pacific Railway
Ticker: CP
2015 EPS: $11.15
2015 Price to Earnings: 20.3
Price Target: C$278
Comment:"As cost cutting comes to an end, low costs / high service can accelerate rev. growth toward 10%," Morgan Stanley's William Greene wrote. "There are plenty of examples of low-cost, high-service transportation providers that consistently outgrow peers, and we believe CP will be another."
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