We’re heading toward the final weeks of 3Q25, and while some investors have been cautious, the backdrop is far from bleak. Despite softer jobs data and September’s reputation as a difficult month for stocks, the major indexes remain near record highs. The S&P 500 has climbed 10% year-to-date, while the NASDAQ is up 12.5%.
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What’s fueling much of this resilience is growing confidence that the Federal Reserve will pivot back to rate cuts this month. That potential shift in policy is being seen as a major tailwind, offering markets a solid catalyst and reinforcing optimism that easier monetary conditions could keep the rally alive.
Mike Wilson, chief US equity strategist at Morgan Stanley, sums up the situation: “At Jackson Hole, Chair Powell appeared to confirm what the bond market was pricing – a September start to Fed rate cuts… While the bond market is already pricing ~5 cuts by year-end 2026, our work shows that equities typically deliver strong performance during Fed cutting environments. Further, valuation tends to remain supported when the policy rate is being reduced and earnings growth is above the long-term median. This is our expectation for stocks over the next 12 months.”
This overall upbeat market outlook has the Morgan Stanley stock analysts scanning the markets for their top picks to round out 2025. Using the TipRanks platform, we took a closer look at three of those picks and found that the trio enjoys strong support from the rest of the Street. Let’s dive in.
Chewy(CHWY)
The first Morgan Stanley pick we’ll look at is Chewy, an online retailer founded in 2011 and working in the pet supply business. The company went public in 2019, and today has a market cap of ~$17.6 billion.
The pet supply market is a niche business, but a substantial one, encompassing everything from food and toys to veterinary medicine and services to boarding and training, and pet owners are seeking these goods and services for every critter imaginable: cats and dogs, birds and guinea pigs, assorted rodents, exotic fish, lizards, and turtles. Chewy has organized its online retail site to make these products easy to find, no matter what animal a pet owner has. The company even offers goods and services for livestock such as horses and chickens.
In recent years, Chewy expanded from basic pet supply goods – think food, bedding, cat litter, and the like – to add veterinary and pet pharmaceutical care to its service lineup. Chewy’s veterinary network features clinics in South Florida, Atlanta, Denver, and the Austin, Dallas, and Houston areas in Texas. Vet services frequently lead to prescriptions, and pharmacy services are available for a wide range of creatures, from the most common dogs and cats to horses and exotic pets.
Altogether, Chewy offers more than 130,000 products and services through its website and network, backed up by conventional 1-2 day delivery. The company has proven to be popular with consumers, and at the end of fiscal 2024 it boasted approximately 20.5 million active customers.
In its last quarterly report, covering fiscal 1Q25 – the quarter ending this past May 4 – Chewy continued to show strong revenue gains. The top line of $3.12 billion was up 8.3% year-over-year and beat the forecast by over $40 million; at the bottom line, the non-GAAP EPS of 35 cents was up 4 cents from the prior year and came in a penny better than expected. The company will release its fiscal Q2 results on September 10.
Morgan Stanley’s Nathan Feather sees a clear path for Chewy to continue making gains, and writes of the stock: “We see a high likelihood of a FY25 revenue guidance increase as the implied 2H decel doesn’t appear to be supported by intraquarter trends. In addition, the pet macro is showing early signs of life with improving web traffic, search interest, and shelter data; if pet household formation or pricing picks up in 2H25, a return to 10%+ revenue growth appears on the table. There is heavier debate on the potential for a FY25 EBITDA guidance raise; we believe it is more likely than not given historical conservatism and the misunderstood magnitude of one-off SG&A costs in 1Q set to roll off through the year.”
“Taken together,” the analyst summed up, “we are tactically positive into the print. CHWY remains our Top Pick with improving share gains, a compelling margin inflection, and emerging clinic bull case.”
Feather puts an Overweight (i.e., Buy) rating on Chewy’s stock, and his $50 price target points toward a one-year upside of 18%. (To watch Feather’s track record, click here)
Overall, CHWY shares have a Strong Buy consensus rating, based on 22 recent analyst reviews that include 17 Buys and 5 Holds. The stock is priced at $42.33 and the $47.68 average price target implies an upside potential of 13% in the year ahead. (See CHWY stock forecast)
EQT Corporation (EQT)
Next up is a leader in the US hydrocarbon energy sector, EQT. This company traces its roots to 1888, and is one of the largest natural gas producers in the gas-rich basins of the Appalachian region. EQT has extensive land holdings in three states – Pennsylvania, Ohio, and West Virginia – and taps into the resources of the vast Marcellus Shale.
The company’s largest holdings, totaling over 100,000 net acres, are in Pennsylvania, where it has an extensive presence in the southwest corner of the state and smaller holdings in the north-central area. In West Virginia, EQT holds 600,000 net acres, mainly in areas abutting the neighboring corner of Pennsylvania. And finally, in Ohio, the company is developing the Utica Shale in Belmont County, and holds 150,000 net acres across the Ohio River from the West Virginia holding. EQT makes extensive use of horizontal drilling and hydraulic fracturing techniques to maximize the efficiency of its wells and to tap resources located as much as 6,000 feet below the surface.
In addition to its natural gas production activities, EQT also has extensive assets and operations in the midstream sector. This is a vital element of the natural gas industry, making up the infrastructure that transports gas from the wellheads and stores it for later use and export. EQT’s midstream assets include gathering, storage, and pipeline infrastructure across the Appalachians.
EQT generated high operating revenues in its last reported quarter, 2Q25, of $2.56 billion. This figure was up an impressive 167% year-over-year, reflecting both strong sales and strong pricing. EQT’s non-GAAP EPS, at 45 cents, marked a decided turnaround from the 8-cent-per-share loss reported in 2Q24. The current figure beat the forecast by 5 cents per share. The company’s free cash flow in the second quarter of this year came to $240 million, compared to a $171 million loss one year earlier.
This large-scale energy player – EQT has a market cap value of $32 billion – is covered by 5-star analyst Devin McDermott. In his note for Morgan Stanley, McDermott points out EQT’s ability to expand production and generate cash.
“We expect shares to continue to re-rate as management executes on further deleveraging, delivery of ‘upside’ synergies (which are advancing ahead of plan), and strategic growth (including execution on recently announced midstream & power opportunities). We believe EQT’s leading cost structure ($2.00 breakeven, falling to $1.80-$1.90 over time) and vertical integration are key differentiators vs. peers, supporting resilience in downcycles and outsized FCF generation during high price periods. These characteristics underpin an attractive risk-reward to play tightening and more volatile gas markets over the coming years… [We] reiterate EQT as our Top Pick within US E&P,” McDermott noted.
These comments support the analyst’s Overweight (i.e., Buy) rating, while his $69 price target suggests an upside of 34% in the next 12 months. (To watch McDermott’s track record, click here)
The 19 recent analyst reviews here include 13 Buys and 6 Holds, for a Moderate Buy consensus rating. EQT shares are priced at $51.60 with an average target price of $63.89 to indicate a 24% one-year upside potential. (See EQT stock forecast)
Nu Holdings(NU)
Last up is Nu Holdings, a fintech that operates in the Brazilian banking sector. The company’s customer face is Nubank, a São Paulo-based online bank that offers customers in Brazil, Mexico, and Colombia a wide range of financial services, including digital bank accounts, access to personal loans, credit cards, and even cashback rewards. In addition, the bank’s customers can make use of a crypto investment platform that can support as many as 20 crypto coins.
Those are valuable services, made more so by the convenience of digital access, and in the 12 years since its founding, Nubank has leveraged that convenience to attract more than 122 million customers. The company’s presence is especially strong in Brazil, where some 60% of adults are Nubank customers, and where the company steered over 20 million Brazilians to their first credit card – in just five years.
All of this makes Nubank one of the world’s largest online banking platforms. This success is reflected in the company’s recent share gains – the stock has outperformed this year and gained 42% year-to-date – and in its market cap of $71 billion. More importantly, the company’s success can be seen in its last set of quarterly results, for 2Q25.
In that quarter, Nu Holdings showed a quarterly top line of $3.67 billion – a company record – and reported that its net income, at $637 million, had grown by a factor of three over the past two years. The company’s customer base expanded by 4.1 million in the quarter, for a 17% year-over-year gain.
This relatively new online bank has caught the attention of Morgan Stanley analyst Jorge Kuri, who notes Nubank’s successes: its high-end tech, its fast-growing customer base, and its attractive services and pricing, to support his upbeat outlook.
“We believe Nubank is uniquely positioned to build one of the largest and most valuable banking franchises in Latin America, supported by world-class technology, exceptional customer satisfaction, market-leading pricing, and strong unit economics. We think the market continues to significantly underestimate Nubank’s ability to scale profitably – especially through deeper cross-sell in Brazil. Our granular, bottom-up model – built by product and by country using detailed unit economics and TAM assumptions – suggests Nubank could reach a US$100 billion valuation by 2026… Nubank is our Latam financials Top Pick,” Kuri stated.
Based on this stance, Kuri gives NU shares an Overweight (i.e., Buy) rating, with an $18 price target that implies a potential one-year gain of 22%. (To watch Kuri’s track record, click here)
The Street is similarly bullish here. This stock’s 14 recent analyst reviews split 11 to 3 in favor of Buy over Hold, for a Strong Buy consensus rating. The average price target, at $17.24, and current trading price, at $14.74, together suggest a 17% upside for the year ahead. (See NU stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
