Here are 4 'high conviction' earnings stock picks from Morgan Stanley — including Caterpillar

Published Fri, Jul 20 20181:35 PM EDT

Morgan Stanley shared with its clients the firm's best current stock picks for earnings season. “We highlight 10 names for which Morgan Stanley Research analysts have high conviction going into earnings season,” the firm’s research team said in a note to clients Thursday. “Our analysts believe that one or more imminent events will drive the share price materially over the next 15-60 days.” Here are four companies that made the Morgan Stanley's recommended list and their price targets. 1) Caterpillar (CAT) “We see potential for another beat and raise from CAT this quarter, especially as retail sales trends have accelerated in LatAm/EAME/APAC vs. March, and our AlphaWise Construction Dealer Survey points to strong 2Q NA sales.” Morgan Stanley analyst Courtney Yakavonis has a $185 price target for Caterpillar shares, representing 33 percent upside to Thursday's close. The company will report its second-quarter results on July 30. 2) SVB Financial (SIVB) “Our top pick in the midcap banks into 2Q18 earnings is SIVB. … We also expect management to increase its 2018 guidance for net interest income growth to the 'mid 30s', from 'low 30s' given the June rate hike, which should drive further upward revisions to EPS estimates.” The firm’s analyst Ken Zerbe has a $350 price target for SVB Financial shares, representing 14 percent upside to Thursday’s close. The company will report its second-quarter results on July 26. 3) The Carlyle Group (CG) “We favor CG into the 2Q print driven by strong investment performance setting the stage for strong performance fees. … the market [is] assigning little relative value to future performance fees despite a more sustainable cash harvesting stream than peers.” Morgan Stanley analyst Michael Cyprys has a $30 price target for The Carlyle Group shares, representing 26 percent upside from Thursday’s close. The company will report its second-quarter results on August 1. 4) O’Reilly Automotive (ORLY) “We believe market expectations on comps are ~4% following generally favorable weather conditions in the quarter and that ORLY will deliver on that bar. … Stock should continue to grind higher with Q2 a positive catalyst. If there is risk to our Q2 forecast, it is to the upside.” The firm’s analyst Simeon Gutman has a $290 price target for O’Reilly Automotive shares, but also gave a bull scenario forecast of $350. The stock closed at $299.23 Thursday. O’Reilly Automotive will report its second-quarter earnings results on July 25.

A Caterpillar 330DL track excavator

Daniel Acker | Bloomberg | Getty Images

Morgan Stanley shared with its clients the firm's best current stock picks for earnings season.

“We highlight 10 names for which Morgan Stanley Research analysts have high conviction going into earnings season,” the firm’s research team said in a note to clients Thursday. “Our analysts believe that one or more imminent events will drive the share price materially over the next 15-60 days.”

Here are four companies that made the Morgan Stanley's recommended list and their price targets.