Morgan Stanley has identified several stocks that might weather the storm as the Trump administration’s tariffs loom on the horizon. Starting Tuesday, these levies on imports from Canada, China, and Mexico are set to be enforced. Despite Commerce Secretary Howard Lutnick’s comments on Sunday, suggesting that tariffs on Mexican and Canadian goods might be less than the initial 25% announced last month, the prevailing uncertainty continues to rattle the markets. As a result, the S&P 500 shed more than 1% in February.
Looking forward, Michael Wilson, an equity strategist at Morgan Stanley, believes the impact of tariffs will serve as a more rotational influence rather than a decisive factor on indices. Nonetheless, he warns that if broader tariffs, especially those beyond China, are imposed with higher rates for an extended period, it could affect market volatility (“beta”).
In response to this uncertain trading environment, Morgan Stanley has scoured the market to spotlight value stocks that may still thrive. These companies are reflected as being “more insulated” under the new tariff conditions due to their pricing power and substantial market shares. Among these, Ulta Beauty stands out. Its stock has slid over 16% in 2025, yet analysts polled by FactSet predict a potential upside of over 28% for the stock. In January, Morgan Stanley upgraded Ulta, with analyst Simeon Gutman praising it as “a strong, durable contender in an ever-evolving, appealing sector. With the beauty industry on an uptrend, Ulta’s revenues are poised to rise accordingly.”
Another name on Morgan Stanley’s radar is Levi Strauss. Though its shares have risen more than 3% this year, the company reported upbeat fourth-quarter results in January, despite providing modest guidance moving forward. Levi Strauss cited the strengthening U.S. dollar as a potential headwind on future sales. Morgan Stanley has assigned an equal weight rating to the stock; however, according to FactSet consensus, Levi Strauss could see nearly a 20% increase. Earlier this year, Paul Kearney from Barclays rated the stock overweight, pointing out, “Even with external and internal challenges, there’s potential for Levi Strauss to regain market share in men’s bottoms, refine their operational efforts and improve range optimization, especially with more investment in direct-to-consumer strategies, and enhance agility in their merchandising for tops.”
Other companies making Morgan Stanley’s list include Dollar General, known for its discounts, and Planet Fitness, a popular gym chain.
