Four ESG Investing Stars Are Highlighted By Morgan Stanley

Four American stocks are included on Morgan Stanley's list of the biggest rising stars in the socially conscious investing sector.

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The firm has selected its top picks among what it calls "rate of change" stocks among the environmental, social, and governance stocks, according to its analyst Stephen Byrd in a note to clients he sent on Monday. North and South American stocks that have been highlighted in this article are largely traded on the New York Stock Exchange.

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The term "rate of change" refers to a framework that is used to identify companies that are making socially conscious advances which, in turn, can benefit the underlying business models of these companies. The focus will be on those who are up and coming in the field of environmental, social, and governance rather than those who have already established themselves as leaders within it and who may have been overlooked due to their socially conscious work.

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This is a list of the top four stocks that are listed in the United States with regard to the "rate of change" for the Americas as a whole.

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Morgan Stanley analysts believe that Deere will be able to gain momentum over at least the next three to six months due to the strong guidance it has for the fiscal year 2023. Management commentary from the firm also indicated that the large agriculture cycle would continue to be strong through the fiscal year 2023, as well as until 2024, which would disprove the argument that the company is too cyclically oriented for investors to increase their exposure in the near future.

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In contrast to the broad market index, Deere has underperformed the S&P 500 this year, slipping 1.7% compared to the broad index's 2% advance. Despite that, the stock outperformed the S&P 500 by 25% last year, while the S&P 500 declined 19.4%.

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Morgan Stanley also listed Eastman Chemical as one of the companies listed. Earlier this year, the materials company announced that all of the major equipment has been installed in its molecular recycling factory in Kingsport, Tenn., which it expects to be operational by the middle of 2023, according to a bank statement. It is anticipated that the firm's report will lead to the creation of similar facilities in France and another, yet-to-be-disclosed US city in the future, according to the firm's report.

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The management estimates that the Kingsport plant will have a 15% rate of return for the company, while the other plants are likely to have a rate of return closer to 12%, Morgan Stanley said.

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There was a 32.6% decline in Eastman's stock price last year. During the first quarter of 2023, the stock has risen by 1.4%.

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On the other hand, the prices of New Fortress Energy have fallen 22% this year after a 75.7% surge in 2022. Last month, FactSet reported that the company had come in below analysts' expectations in terms of its revenue and adjusted EBITDA, but its adjusted earnings per share were above the analysts' consensus estimates.

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Morgan Stanley also included Nu Holdings, a Brazilian digital banking company that is listed on the New York Stock Exchange, on its list of companies to watch. After plunging 56.6% in 2022, shares of the company are up 16% this year, regaining some ground after plunging by 16% in 2018.

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A $500 million investment was made by Warren Buffett's Berkshire Hathaway into the bank in 2021. This was also the year that the bank went public. It was one of the largest IPOs in 2021.