3 Actions to Protect Your Portfolio from Volatility according to Morgan Stanley

Morgan Stanley’s Picks to Safeguard Your Portfolio Amid Market Volatility

In a scenario of increasing economic uncertainty, marked by unstable growth forecasts and a lack of clear guidance from monetary authorities, Morgan Stanley has identified 3 actions to protect your portfolio from volatility after the Cboe Volatility Index (Vix), the indicator of market fear, reached 65 points during the trading session on August 5.

AbbVie

AbbVie (NYSE: ABBV), one of the world’s largest pharmaceutical companies, has been added to Morgan Stanley’s “Fresh Money Buy List” for its ability to offer stability and sustainable growth in an uncertain economic environment.
Morgan Stanley chose AbbVie for its strong position in the healthcare sector, which has historically shown resilience during periods of volatility.
The diversified and innovative pipeline of AbbVie has contributed to revenue and earnings growth above the industry average.
With a target price of $211 per share, Morgan Stanley predicts a further 10% increase from current levels.
Other investment banks like Wells Fargo, Barclays, and HSBC have also provided positive evaluations, with target prices ranging from $200 to $218.
AbbVie recently reported earnings per share of $2.65 in the second quarter, surpassing estimates, and a revenue of $14.46 billion, a 4.3% year-over-year increase.
The company also announced a quarterly dividend of $1.55 per share, yielding 3.21%, confirming its financial strength and attractiveness to investors.

Public Service Enterprise

Public Service Enterprise Group (NYSE: PEG) was included by Morgan Stanley in the list of defensive stocks to monitor, thanks to its strong presence in the utility services sector.
Specialized in electricity and natural gas transmission, PEG is a strategic choice for those seeking stability in times of economic turbulence.
With a substantial 32% growth in 2024, reaching $80 per share, PEG’s performance is supported by the stability of its regulated business and increasing energy demand.
Morgan Stanley maintains an “Overweight” rating for PEG with a target price of $78 per share, anticipating above-average growth in a volatile market context.
Despite slightly below-estimate earnings per share of $0.63 in the second quarter, with a revenue of $2.42 billion, several analysts, including Guggenheim and Royal Bank of Canada, have raised their ratings and price targets on PEG, reaffirming its strength as a defensive investment.

Northrop Grumman

Northrop Grumman (NYSE: NOC), a leading company in the aerospace and defense sector, is among Morgan Stanley’s top picks with exposure to the industrial sector.
Despite underperforming its peers with only a 7.3% increase in the last year, the company represents an undervalued investment opportunity with significant long-term upside potential.
With a market capitalization of $72.29 billion and a share price of $498.32, Northrop Grumman is poised to benefit from increased global defense spending.
Morgan Stanley’s “Overweight” rating, with a target price of $592 per share, suggests an 18% growth potential from current levels.
This forecast is based on the view that Northrop Grumman, despite recent underperformance, is well positioned to capitalize on higher demand for defense products and services, supporting sustained long-term growth.
For investors looking to safeguard their portfolios from volatility, Northrop Grumman represents a strategic choice with significant appreciation potential.

(For further details, you can visit www.morganstanley.com)