Morgan Stanley recently named a bunch of stocks that analysts believe will be significantly undervalued in the new year. The company said investors should buy these companies now because the risk reward has never been better. CNBC Pro compiled Morgan Stanley research to find the best-positioned stocks to buy in 2023. These include Dick’s Sporting Goods, Verizon, Alibaba, Constellation Brands and Sealed Air. It’s an “Olympic transformation” for the sportswear retailer, according to analyst Simeon Gutman. The company said earlier this week that Dick’s Sporting Goods is one of the “rare” retailers that has succeeded in changing its revenue/profit profile. “Retail transformation stories tend to lead to outsized stock returns,” he said. But Gutman worries that investors are still unconvinced, admitting that the company has a history of “uneven sales growth.” However, the company said investors should buy the stock. Gutman added that Dick’s Sporting Goods made structural changes before the pandemic, helping the company have a “faster-growing and more profitable business”. Meanwhile, he said the retailer’s customers have become wealthier and the sporting goods category has room for growth. “If DKS retains most of the sales and profit margins driven by COVID, the stock will screen for one of the best risks/rewards in the Retail industry,” he wrote. The company’s shares are up 6.9% this month. Constellation brand analyst Dara Mohsenian is backing the beer and beverage giant’s stock – and so should investors, the company said recently. Shares have fallen nearly 9% over the past 12 months, but Mohsenian said the fear is largely overwhelming. “To put it bluntly, we think the macros are having a negative and long-term impact on STZ’s beer exhaustion growth and expect more exhaustion in the ~6% range going forward, compared to our previous modeled forecast of ~6-7%,” he said. But that creates an “attractive risk/reward,” according to the company. Mohsenian said there are many beneficial catalysts ahead, including positive distributor feedback and a long-term stake increase. Furthermore, in the company’s third fiscal quarter, beer revenue growth came ahead of consensus. Morgan Stanley added that the market has unfairly called Constellation “a broken growth story”. That’s a reason to capitalize on buying opportunities, says Mohsenian. “Limited upside, substantial upside,” he said. According to analyst Angel Castillo and his team, the producer of bubble wrap and other packaging products is operating at full capacity. In particular, the stock is too cheap at current levels, Castillo wrote in a recent outlook report. He named Sealed Air his top pick for 2023. The company says it sees “idiosyncratic growth drivers, balance sheet strength and solid shareholder returns.” Together, these factors will drive “outstanding performance in numbers, both in 2023 and in the long-term,” said Castillo. The analyst notes that Sealed Air is not immune to a difficult macro, but he says it is well equipped to overcome obstacles. “We think valuation/stability will be even more important in 2023 than last year and prefer Sealed Air because of its distinct operating model, which has driven prices/ raw material costs and outstanding margin expansion in 2022.” Shares have fallen about 20% over the past year. Constellation Brands “The foregoing is very clear, we think the macros are having a negative and long-term impact on STZ’s burnout growth and expect more draining growth in the future.” about ~6% forward, versus our previous modeled forecast of ~6-7%… Stock looks attractive here with limited downside, substantial upside… Why do we believe each of these concerns is overblown, despite some merit, and we find the risk/reward attractive here… In fact, we believe the market market is valuing STZ unfairly a broken growth story.” Alibaba “BABA appears to be undervalued with an old growth P/E F24e of 11x. … Deregulation, especially for fintech, is the main catalyst. Elevation to a non-consensus Top Pick – for the first time in three years … China’s industry internet top pick in 2023: We see many catalysts (reopening, cost optimization, loosening regulatory environment, cloud acceleration and pricing) drives the most attractive risk-reward in the industry.” Sealed Air “We reiterate our CCK & SEE OWs, where we see idiosyncratic growth drivers, balance sheet strength, and solid shareholder returns. … Hence. , we think price strength/stability will be even more important in 2023 than last year & prefer Sealed Air because of its distinct operating model, which has driven outstanding performance in terms of performance. raw material prices/costs and margin expansion in 2022. … Maintain an outsized share of Crown Holdings & Sealed Air, which we believe has unique factors that could drive overperformance numerically superior, both in 2023 and longer term.” Verizon “Attractive risk-reward with incremental free cash flow. … After underperforming in ’22, VZ trades at a historically attractive valuation on an absolute basis. We see a potential performance improvement in ’23 and a 45% acceleration in FCF in ’24. … However, we believe that at current levels, the stock is currently bearish. for a relatively negative outlook and seeing signs that the trend is gradually improving.” Dick’s Sporting Goods “An Olympic Transformation. …LT we believe DKS will be a faster-growing and more profitable business. … Retail transformation stories tend to lead to stock returns.” A few examples of retailers that have successfully changed their revenue/profit profile DKS may be one of the rare… DKS has a history of growing sales and margins. Profits are uneven, while operating in an industry that has benefited significantly from COVID.… If DKS retains most of its revenue and profit thanks to COVID, the stock screen with best risk/reward on sale odd.”