Morgan Stanley has refreshed its stock views for the Asia-Pacific region, presenting a mix of defensive and cyclical convictions across banking, shipping and industrials as investors contend with an uneven operating backdrop.
The firm's guidance signals differentiated regional exposure: cautious positioning where valuation and earnings appear strained, and a more constructive stance where cyclical or contract-driven momentum supports upside.
National Australia Bank - Underweight
Morgan Stanley retains an underweight recommendation on National Australia Bank (NAB.AX). The bank's recent rally in July and prevailing trading multiples make current valuation harder to justify in the analyst's view. The firm points to an uncertain operating environment and a weak earnings outlook as the core reasons for its cautious rating.
COSCO SHIPPING Energy Transportation - Overweight
The investment bank keeps an overweight rating on COSCO SHIPPING Energy Transportation (1138.HK), taking a contrarian stance on the tanker cycle relative to broader market expectations. While many participants anticipate 2026 as the bull-cycle peak for tankers, Morgan Stanley projects that 2027 could produce stronger outcomes than 2026. That view is premised on the possibility of delays to the reopening of the Strait of Hormuz, a scenario that could prolong favourable market conditions for tanker operators.
Supporting the call, COSCO SHIPPING Energy Transportation posted solid second-quarter results, with revenue up 24% year-over-year to CNY 6.13 billion and net profit rising 46% to CNY 1.83 billion.
Mitsubishi Heavy Industries - Overweight
Morgan Stanley has upgraded earnings forecasts and raised its price target for Mitsubishi Heavy Industries (7011.T) following a robust first-quarter performance. The firm maintains an overweight recommendation, citing an outlook for continued profit generation and margin improvement driven by strength in the company's energy-related operations. These factors underpin the analyst's positive stance on the Japanese industrial conglomerate's earnings trajectory.
In a notable development cited by the bank, Mitsubishi Heavy Industries secured a JPY 378 billion contract from Japan's Ministry of Defense to develop and produce next-generation missile systems.
Context and investor considerations
Overall, Morgan Stanley's list illustrates uneven prospects across Asia-Pacific sectors: selective caution in Australian banking due to valuation and earnings risk, paired with conviction in specific shipping and industrial names where cycle timing or contract wins support upside. Investors navigating the region will face sector-specific fundamentals and cyclical dynamics that shape these differentiated recommendations.