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 stocks Morgan Stanley says stand to lose the most from secular pressures in the next 12-18 months:
16. Macy’s
Ticker: M
Sector: Retail
Market Cap: $10 billion
Downside to bear: 50.9%
Year-to-date performance: +30%
15. Patterson Companies
Ticker: PDCO
Sector: Healthcare
Market Cap: $2.4 billion
Downside to bear: 52.5%
Year-to-date performance: -33%
14. United Natural Foods
Ticker: UNFI
Sector: Retail
Market Cap: $1.12 billion
Downside to bear: 54.2%
Year-to-date performance: -57%
13. Kohl’s
Ticker: KSS
Sector: Retail
Market Cap: $10.95 billion
Downside to bear: 54.3%
Year-to-date performance: +20%
12. Henry Schein
Ticker: HSIC
Sector: Healthcare
Market Cap: $12.88 billion
Downside to bear: 55%
Year-to-date performance: +26%
11. Waddell & Reed Financial
Ticker: WDR
Sector: Financials
Market Cap: $1.57 billion
Downside to bear: 55.1%
Year-to-date performance: -6%
10. Juniper Networks
Ticker: JNPR
Sector: Technology
Market Cap: $9.55 billion
Downside to bear: 60.3%
Year-to-date performance: +2%
9. MSG Networks
Ticker: MSGN
Sector: Media
Market Cap: $1.65 billion
Downside to bear: 62.9%
Year-to-date performance: +23%
8. Fitbit
Ticker: FIT
Sector: Financials
Market Cap: $1.36 billion
Downside to bear: 63.4%
Year-to-date performance: -8%
7. Bed Bath & Beyond
Ticker: BBBY
Sector: Transportation
Market Cap: $1.79 billion
Downside to bear: 69.1%
Year-to-date performance: -41%
6. Abercrombie & Fitch
Ticker: ANF
Sector: Retail
Market Cap: $1.1 billion
Downside to bear: 69.6%
Year-to-date performance: +7.5%
5. Tenneco
Ticker: TEN
Sector: Consumer Discretionary/Industrials
Market Cap: $1.95 billion
Downside to bear: 76.5%
Year-to-date performance: -42%
4. Avis Budget
Ticker: CAR
Sector: Consumer Discretionary/Industrials
Market Cap: $2.295 billion
Downside to bear: 83.1%
Year-to-date performance: -33%
3. EQT
Ticker: EQT
Sector: Technology
Market Cap: $4.75 billion
Downside to bear: 83.9%
Year-to-date performance: -41%
2. Seaspan
Ticker: SSW
Sector: Transportation
Market Cap: $1.64 billion
Downside to bear: 89.2%
Year-to-date performance: +37%
1. Hertz Global
Ticker: HTZ
Sector: Retail
Market Cap: $1.61 billion
Downside to bear: 89.6%
Year-to-date performance: -20%
