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Morgan Stanley has released the stocks its analysts think could lose more than half their value within the next 12 to 18 months.
These companies are "facing challenges that are independent of cyclical trends," the bank's analysts said.
They expect the US stock market to consolidate the secular bull run next year and for US economic growth to slow down, followed by a re-acceleration in 2020. While the macro outlook seems favorable, analysts identified some companies with secular challenges including market-share loss, rising competition, deteriorating end-markets, cost pressures, and others.
To compile the list, Morgan Stanley's equity-research team started with the stocks its analysts rated as "underweight." The bank then focused on stocks with an "unfavorable risk-reward skew," looking for stocks where the cons outweighed the pros.
Here are the 16 stocksMorgan Stanley says stand to lose the most from secular pressures in the next 12-18 months:
16. Macy’s
)
MI
Ticker: M
Sector: Retail
Market Cap: $10 billion
Downside to bear: 50.9%
Year-to-date performance: +30%
Source: Morgan Stanley
15. Patterson Companies
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MI
Ticker: PDCO
Sector: Healthcare
Market Cap: $2.4 billion
Downside to bear: 52.5%
Year-to-date performance: -33%
Source: Morgan Stanley
14. United Natural Foods
)
MI
Ticker: UNFI
Sector: Retail
Market Cap: $1.12 billion
Downside to bear: 54.2%
Year-to-date performance: -57%
Source: Morgan Stanley
13. Kohl’s
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MI
Ticker: KSS
Sector: Retail
Market Cap: $10.95 billion
Downside to bear: 54.3%
Year-to-date performance: +20%
Source: Morgan Stanley
12. Henry Schein
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MI
Ticker: HSIC
Sector: Healthcare
Market Cap: $12.88 billion
Downside to bear: 55%
Year-to-date performance: +26%
Source: Morgan Stanley
11. Waddell & Reed Financial
)
MI
Ticker: WDR
Sector: Financials
Market Cap: $1.57 billion
Downside to bear: 55.1%
Year-to-date performance: -6%
Source: Morgan Stanley
10. Juniper Networks
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MI
Ticker: JNPR
Sector: Technology
Market Cap: $9.55 billion
Downside to bear: 60.3%
Year-to-date performance: +2%
Source: Morgan Stanley
9. MSG Networks
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MI
Ticker: MSGN
Sector: Media
Market Cap: $1.65 billion
Downside to bear: 62.9%
Year-to-date performance: +23%
Source: Morgan Stanley
8. Fitbit
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MI
Ticker: FIT
Sector: Financials
Market Cap: $1.36 billion
Downside to bear: 63.4%
Year-to-date performance: -8%
Source: Morgan Stanley
7. Bed Bath & Beyond
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MI
Ticker: BBBY
Sector: Transportation
Market Cap: $1.79 billion
Downside to bear: 69.1%
Year-to-date performance: -41%
Source: Morgan Stanley
6. Abercrombie & Fitch
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MI
Ticker: ANF
Sector: Retail
Market Cap: $1.1 billion
Downside to bear: 69.6%
Year-to-date performance: +7.5%
Source: Morgan Stanley
5. Tenneco
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MI
Ticker: TEN
Sector: Consumer Discretionary/Industrials
Market Cap: $1.95 billion
Downside to bear: 76.5%
Year-to-date performance: -42%
Source: Morgan Stanley
4. Avis Budget
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MI
Ticker: CAR
Sector: Consumer Discretionary/Industrials
Market Cap: $2.295 billion
Downside to bear: 83.1%
Year-to-date performance: -33%
Source: Morgan Stanley
3. EQT
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MI
Ticker: EQT
Sector: Technology
Market Cap: $4.75 billion
Downside to bear: 83.9%
Year-to-date performance: -41%
Source: Morgan Stanley
2. Seaspan
)
MI
Ticker: SSW
Sector: Transportation
Market Cap: $1.64 billion
Downside to bear: 89.2%
Year-to-date performance: +37%
Source: Morgan Stanley
1. Hertz Global
)
MI
Ticker: HTZ
Sector: Retail
Market Cap: $1.61 billion
Downside to bear: 89.6%
Year-to-date performance: -20%
Source: Morgan Stanley
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