Morgan Stanley thinks the longest bull market in history may be coming to a close, and that stock-picking is going to become more important if markets head for a slowdown.

To help investors make better decisions, the firm highlighted a list of stocks that it believes will be winners in the long-term.

The companies are picked not because they are the best-valued stocks, but because they have enduring competitive advantages based on several criteria - including competitive advantage, business model, pricing power, cost efficiency, and growth.

Here is Morgan Stanley's top pick in each sector, listed in ascending order of their potential upsides when compared to the firm's price target:


Ticker: WELL

Sector: Real Estate

Market Cap: $29.7 billion

Revenue Growth CAGR ('16-'21e): +5%

EPS Growth CAGR ('16-'21e): 0%

Price target: $77

Potential upside: 0%

Morgan Stanley comment:

"Beneficiary of the aging demographic," analyst Vikram Malhotra said. "Starting in 2020, an aging demographic should serve as a boon for senior housing demand as growth in the 85+ year old cohort is expected to accelerate to 1.7% from 0.9% in 2019, with annually growth rising to 2.3% by 2023."

NextEra Energy

Ticker: NEE

Sector: Utilities

Market Cap: $91.3 billion

Revenue Growth CAGR ('16-'21e): +4%

EPS Growth CAGR ('16-'21e): +10%

Price target: $191

Upside potential: 0%

Morgan Stanley comment:

"Best-in-class utility coupled with a premier renewable energy business," analyst Stephen Byrd said. "We believe NextEra has the largest set of growth opportunities, a strong balance sheet, and the best competitive position among the US utilities we cover."

Estee Lauder

Ticker: EL

Market Cap: $57.5 billion

Sector: Consumer Staples

Revenue Growth CAGR ('16-'21e): +8%

EPS Growth CAGR ('16-'21e): +15%

Price target: $166

Potential upside: +2%

Morgan Stanley comment:

"The global middle class is expected to expand 50% by 2028 and increasingly aspires to prestige brands," said analyst Dara Mohsenian. "We view premiumization as a sustainable trend as consumers are seeking the high level of service offered by prestige brands, and younger consumers are more focused on beauty, influenced by social media."


Ticker: V

Sector: Information technology

Market Cap: $333.4 billion

Revenue Growth CAGR ('16-'21e): +13%

EPS Growth CAGR ('16-'21e): +20%

Price target: $165

Potential upside: +6%

Morgan Stanley comment:

"We view the threat of disruption from new entrants like device manufacturers and social/commerce networks as fairly low," analyst James Faucette said. "Many of the new payment players tend to partner with Visa and operate on its rails, given Visa's competitive cost structure and moat."


Ticker: MCD

Sector: Consumer discretionary

Market Cap: $139.2 billion

Revenue Growth CAGR ('16-'21e): -2%

EPS Growth CAGR ('16-'21e): +11%

Price target: $210

Potential upside: +14%

Morgan Stanley comment:

"McDonald's has shifted its business model to a nearly all-franchised one in recent years ... This has improved the quality of income by swapping company-operated profits for richer streams of rent and royalties," analyst John Glass said.

Emerson Electric

Ticker: EMR

Sector: Industrials

Market Cap: $41.4 billion

Revenue Growth CAGR ('16-'21e): +8%

EPS Growth CAGR ('16-'21e): +13%

Price target: $77

Potential upside: +15%

Morgan Stanley comment:

"EMR's cycle-to-cycle diversity, ability to outgrow Gross Fixed Investment (GFI) over the next few years, and margin expansion potential should drive continued earnings growth through 2021," analyst Josh Pokrzywinski noted.


Ticker: PGR

Sector: Financials

Market Cap: $43.0 billion

Revenue Growth CAGR ('16-'21e): +15%

EPS Growth CAGR ('16-'21e): +32%

Price target: $84

Potential upside:+15%

Morgan Stanley comment:

"PGR's low-cost direct distribution model has propelled its market share from 3% to 10% over the last two decades," analyst Kai Pan said. "Over the next few years, we expect its industry-leading growth to continue."


Ticker: GOOG

Sector: Communication services

Market Cap: $830.9 billion

Revenue Growth Compound Annual Growth Rate (CAGR) for 2016-2021estimate: +21%

Earning per Share Growth CAGR ('16-'21e): +20%

Price target: $1,500

Potential upside: +26%

Morgan Stanley comment:

"GOOGL's ability to continue to innovate to grow its 20-year old, $40bn+ annualized desktop search business is impressive, but we are most encouraged by the strength of YouTube, which is showing strong contribution from branded advertising and a growing base of direct response advertising as well," analyst Brian Nowack said.


Ticker: ANTM

Sector: Health Care

Market Cap: $76.3 billion

Revenue Growth CAGR ('16-'21e): +7%

EPS Growth CAGR ('16-'21e): +19%

Price target: $391

Potential upside: +29%

Morgan Stanley comment:

"At its recent investor day, management outlined growth of 12-15% annually, driven by an improving core business and development of assets beyond the core, such as its PBM [pharmacy benefits manager], that can enable entry into new markets," analyst Zack Sopcak said.

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