These 5 companies are set to crush earnings, Morgan Stanley says

AP/Richard Drew

The earnings season so far indicates that Wall Street has overestimated many companies, according to equity analysts at Morgan Stanley.
Investors should find out the stocks that are undervalued by Wall Street so that their portfolio returns can see a boost when these companies beat earnings forecasts, they said.
They issued a list of companies they believe will post better-than-expected earnings.

The earning results so far indicate that Wall Street has overestimated many companies, according to Morgan Stanley.

As the earnings season heats up, investors should find out the stocks that are undervalued by Wall Street so that their portfolio returns can see a boost when these companies beat earnings forecasts.

"Despite heavy revisions lower (-2.7%) over the last month of the year, to date 4Q18 earnings are still at the low end of the normal 4-6% range for earnings season beats," Morgan Stanley analysts said in a note out on Thursday.

To help traders get more market insights, the firm issued a list of companies that it believes will rally after posting better-than-expected earnings.

Here are the companies that Morgan Stanley listed, in ascending order of their potential upsides (comparing Morgan Stanley’s price target to where shares were trading as of February 1).