The markets are trying to sort out a series of conflicting forces. There’s the bull trend, that’s been pushing stock higher since last summer, which in recent weeks has been partially derailed by fears of inflation. There’s the massive fiscal stimulus of the legislative COVID relief packages, that are helping to fuel that inflationary pressure, but there is also the ongoing vaccination program that holds out the promise of a return to more normal conditions. Morgan Stanley’s chief U.S. equity strategist Mike Wilson has followed the recent ups and downs of the stock markets, and has been sharing the benefit of his experience. “We see two potential risks to be thinking about… First, is the risk associated with interest rates rising sharply as bond markets simply catch up to what other asset prices are already reflecting. Second is the risk that some of the positive operating leverage that we’ve been witnessing in company earnings reports starts to go in reverse,” Wilson noted. Turning from the general picture to a narrower view, Wilson adds, “With this macro backdrop, we continue to favor areas in the market that are reasonably priced…” Taking Wilson’s outlook into consideration, Morgan Stanley analysts are pounding the table on two stocks, with these pros seeing at least 30% upside potential in store. Running the tickers through TipRanks’ database, we wanted to find out exactly what makes them so compelling. TPI Composites (TPIC) We’ll start in the green energy sector, where it connects with manufacturing. TPI Composites is a maker of composite materials, and has been applying that specialized knowledge to the manufacture of wind turbine blades since 2001. In 2019, the last year with full data available, TPI handled 18% of all onshore wind blades sold globally on a megawatt basis. The company saw 2020 net sales hit $1.4 billion, selling more than 9,500 blades. In its recent 4Q20 earnings release, TPI reported results for the quarter and for last year as a whole. The results were strong, beating forecasts by a wide margin, but the stock still fell sharply. A look at the data sheds some light. Fort he quarter, TPI reported $465.6 million in revenues and 14 cents EPS, compared to expectations of $450 million at the top line and 12 cents EPS. Quarterly sales were up 10% year-over-year. At the same time, the strong sales growth for the year was not enough to offset losses incurred at the height of the corona crisis in Q1 and Q2. The company ended the year with a GAAP loss of 52 cents per share. Also on the negative side of the ledge, forward guidance puts 2021 sales in the range of $1.75 billion to $1.85 billion – this will put 2021’s annual growth at about half of what analysts were hoping to see. Morgan Stanley analyst Laura Sanchez sees the company as fundamentally sound, and writes: “We see a risk-reward that is skewed to the upside driven by robust wind installations globally, market dominance given TPI’s global footprint, growth in the transportation sector, and a path to margin expansion… We note, too, that TPIC provides investors a unique way to play secular growth in the global wind and EV markets without taking on exposure to other, usually industrial, sectors.” To this end, Sanchez rates TPIC an Overweight (i.e. Buy), and her $77 price target implies an upside of ~54% in the coming year. (To watch Sanchez’ track record, click here) Wall Street’s analysts generally agree that this is a stock to buy. Of the 10 recent reviews here, 7 are Buys and 3 are Holds, making the consensus rating a Moderate Buy. The $63.10 average price target suggests a 28% one-year upside from the current trading price of $49.60. (See TPIC stock analysis on TipRanks) Carvana Company (CVNA) From industry and green energy, we move to the world online sales, where Carvana has become a major seller of used vehicles, putting a new twist on online vehicle purchases. The company works from a chain of 23 offices and semi-automated vehicle storage garages around the continental US, from which it allows customers to test drive vehicles and pick up purchases. In the fourth quarter of 2020, Carvana sold 72,172 vehicles, an increase of 43% year-over-year. The sales brought in over $1.8 billion in total revenues, for a 65% yoy increase. The company’s gross profit for the quarter, $243.9 million, was up 71% from the year-ago quarter. These strong metrics were seen at the full-year level, too. The 244,111 cars sold in 2020 represented a 37% yoy sales increase, while the $5.587 billion in full-year revenues were up 42% yoy and the gross profits of $793.8 million were up 57% from 2019. The earnings results are reflected in the company’s share performance, which has shown steady growth in the last 12 months. Over that period, CVNA is up 290%. It’s an impressive gain, that caught the attention of Morgan Stanley analyst Adam Jonas. “In our opinion, CVNA’s moat consists of its: 1) first mover advantage, 2) brand awareness, 3) robust nation-wide logistics network, 4) fully online transaction capabilities to buy cars, sell cars, while also offering online financing and warranty options to customers, 5) a less fixed cost and capital intense business model, 6) strong customer service and, 7) the ability to leverage its platform in ancillary business lines, providing it large upside optionality.” Jonas considers CVNA as his “top ranked automotive retailer,” and rates the stock an Overweight (i.e. Buy). Furthermore, the analyst gives CVNA a $420 price target, which implies a 31% upside from current levels. (To watch Jonas’ track record, click here) Carvana’s recent share appreciation has pushed the stock price up to $321.25, slightly above the average price target of $314. This hasn’t stopped Wall Street’s analysts from rating the stock highly, as the analyst consensus rating is a Strong Buy, based on 16 recent reviews which include 13 Buys and 3 Holds. (See CVNA stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. 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.