Morgan Stanley Updates Growth Portfolio: 2 Stocks Added and 2 Removed

Morgan Stanley made changes to its US All Cap Growth Portfolio on Friday, adding two new stocks while removing two others.

The firm incorporated positions in DoorDash and GE Vernova LLC, citing their growth potential and alignment with strategic themes. Concurrently, Morgan Stanley reduced its exposure to Adobe and completely eliminated UnitedHealth Group from the portfolio.

DoorDash was included to capitalize on its status as a leading food delivery service in the U.S. The firm highlighted DoorDash’s unique three-sided network connecting customers, merchants, and delivery contractors, which positions the company for continued growth. With a roughly 60% share of the market, DoorDash is recognized as the dominant player in its sector. Analysts noted the stock’s appealing valuation, supported by multiple growth drivers and its potential for expanding earnings per share. DoorDash holds an Overweight rating, with a price target of $150, indicating approximately 6% upside from current levels.

Similarly, GE Vernova was selected for its strong position in electric power generation equipment. As global electricity needs continue to rise, the company commands a 40% market share in this industry. Morgan Stanley cited three reasons for adding GE Vernova: its leadership in electrical generation equipment and services, attractive valuation with potential for margin expansion and top-line acceleration, and the addition of exposure to the Industrials sector and the emerging AI theme. The stock is also rated Overweight, with a target price of $256.

Conversely, Morgan Stanley reduced its stake in Adobe as part of an effort to diversify its software investments and allocate resources to higher-growth opportunities. Although Adobe has lagged behind the broader market, the firm still views the stock positively. However, it prefaced that it prefers to hold smaller stakes across various stocks rather than a concentrated investment in just a few software companies.

Lastly, the decision to remove UnitedHealth Group was based on its reduced weighting in the benchmark and slower growth outlook. Although the stock achieved a 55% return since a previous increase in 2021, Morgan Stanley believes there are more appealing opportunities in sectors with faster growth.

In summary, these adjustments reflect Morgan Stanley’s ongoing strategy to balance growth potential with the allocation of portfolio resources.