![]() We expect positive operating leverage growth can continue into 2024 as well, even as top-line growth cools." - QR Hold American Express ( NYSE: AXP), Overweight, $186, "Our forecast for slowing growth in marketing and cardmember acquisition expenses should help drive ~430bp operating leverage growth in 2023, its highest in over a decade and a standout among card peers.Alphabet ( NASDAQ: GOOGL), Overweight, price target $135, "We see management focused on durably reengineering the cost base and see GOOGL working to improve AI compute cost efficiency at the infrastructure, model and application layer, which builds confidence that margins won't compress over the long term." - SA Quant Rating Strong Buy.Our guiding principle was to create a list of companies whose business models and market positions would be increasingly differentiated into 2025." There was no prerequisite that they be rated Overweight, and we were largely agnostic about their valuations. "We sought to identify the best franchises, not the most undervalued stocks. "The main criterion is sustainability - of competitive advantage, business model, pricing power, cost efficiency, and growth," they said. A bear market for stocks has persisted into the spring, but there are potential cyclical and secular drivers for equity prices on the horizon, according to Morgan Stanley.ĭrivers include "more accommodative monetary policy as inflation slows a more stable starting point for consumer balance sheets pent-up demand in investment/capex and in certain parts of consumer services a global growth recovery led by economies that have lagged since the pandemic the reemergence of positive operating leverage Artificial Intelligence and its diffusion across sectors and reshoring," equity strategists Michelle Weaver, Mike Wilson, and team wrote in a recent note.
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