As global trading tensions mount, U.S. companies that provide services should be more well sheltered than goods manufacturers, according to Morgan Stanley. The new Trump administration’s economic levies and tariffs pose a serious threat to companies with extensive overseas operations. But certain stocks, such as those providing services to consumers, are in a position to better weather a looming global trade war, Morgan Stanley wrote in a recent note. “Our preferred sectors in a world of supply chain strain driven by multipolar escalation and/or new tariffs vary by region — in some regions there are clear sector implications while in others it is about identifying relative opportunities within sectors. In the U.S., our Equity Strategy team prefers services (Financials, Software, Media & Entertainment, and Consumer Services) over Consumer Goods at the broadest level,” the bank wrote. “Though, among companies more exposed to the supply chain, they prefer enablers within machinery and cap goods where pricing power is also stronger.” In the same note, the bank shared a basket of stocks it considers “well positioned to cope with supply chain strain” in this new era. Some select stocks in the U.S. market that Morgan Stanley has currently assigned an overweight rating are listed below: One stock on the list was Rockwell Automation . Shares of the industrial automation firm have popped 7% over the past 12 months. The stock added 13% last Monday after posting fiscal first-quarter adjusted earnings of $1.83 per share, which exceeded the FactSet consensus estimate of $1.58 per share. Rockwell’s $1.88 billion in revenue came in line with expectations. Analysts are generally split between a bullish or neutral sentiment on shares of Rockwell Automation. The average price target implies a potential upside of 3%. Shares of Martin Marietta Materials have mostly traded rangebound over the past 12 months. In January, Wolfe Research upgraded the construction materials supplier to an outperform rating from peer perform. “We upgrade MLM to Outperform as our favored name in our building materials coverage, after a 16% drop in shares since our March downgrade to Peer Perform. Better pricing power and robust recent M & A can support volumes, even as construction may not recover until later in 2025E,” wrote analyst Timna Tanners. Tanners’ $563 price target is approximately 7% above where shares closed on Friday, although the average analyst price target implies a 16% upside. Analysts generally hold a bullish view on the stock, with 17 of 23 analysts rating the stock a buy or strong buy, according to LSEG. Mobile storage solutions provider Willscot , power management firm Eaton and HVAC manufacturer Trane Technologies were other names on the list.
