MORGAN STANLEY: Buy these 11 stocks right now to reap the strongest possible market-beating returns over the next 3 months

• Morgan Stanley says its "MOST" stocks — a group of companies with high quantitative scores and analyst ratings — have been consistent winners.
• According to strategist Boris Lerner, the firm combines quantitative and traditional approaches to find the stocks with the best risk-adjusted returns over the next three months.
• The companies Lerner is targeting beat the market in May, and they've outperformed over the past year.
• Visit Business Insider's homepage for more stories.

The shocks just keep on coming. From a historic sell-off to the biggest 50-day rally ever, it's hard to know how to handle this market.

Morgan Stanley quantitative strategist Boris Lerner says it's time to shift away from defensive approaches and take some more risk.

"Our Equity Strategy team believes we are now in an early cycle recovery, and recommend shifting to smaller cap and higher quality cyclicals," he said. That might cover the "what," but the "how" is just as important. And Lerner can say he has a short-term strategy that's worked consistently.

It's a blend of stock picking and complex quantitative analysis intended to find the stocks that will deliver the most bang for an investors' buck over the next three months.

"Morgan Stanley's Short Term (MOST) model is a quantitative multi-factor stock selection alpha model that ranks stocks based on their expected 3-month risk-adjusted returns (i.e. alphas)," he said. "Our MOST Quantamental long screen includes stocks in the top quintiles of MOST that are rated Overweight by the Morgan Stanley analysts."

That approach has yielded especially good results lately, as the stocks that meet those criteria have performed over the past year and finished ahead of a strong market in May. 

Listed below are the stocks with the most potential over the next three months, according to Lerner's team. They're ranked from lowest to highest based on the amount of upside they have according to Morgan Stanley's price targets.

SEE ALSO: Michael Gayed's fund relied on just one market signal to book a huge profit when the coronavirus crushed stocks — and his returns are still soaring. He breaks down his simple approach to crisis investing.

11. AbbVie

Ticker: ABBV

Sector: Healthcare

Price target: $95

Upside to target: 0.8%

Source: Morgan Stanley

10. Mastercard

Ticker: MA

Sector: Information technology

Price target: $311

Upside to target: 1.4%

Source: Morgan Stanley

9. Chevron

Ticker: CVX

Sector: Energy

Price target: $103

Upside to target: 1.8%

Source: Morgan Stanley

8. Costco Wholesale

Ticker: COST

Sector: Consumer staples

Price target: $320

Upside to target: 2.7%

Source: Morgan Stanley

7. Comcast

Ticker: CMCSA

Sector: Communication services

Price target: $45

Upside to target: 5.6%

Source: Morgan Stanley

6. Phillips 66

Ticker: PSX

Sector: Energy

Price target: $95

Upside to target: 7.7%

Source: Morgan Stanley

5. Marathon Petroleum

Ticker: MPC

Sector: Energy

Price target: $45

Upside to target: 8.6%

Source: Morgan Stanley

4. AT&T

Ticker: T

Sector: Communication services

Price target: $38

Upside to target: 16.2%

Source: Morgan Stanley

3. Progressive

Ticker: PGR

Sector: Financials

Price target: $94

Upside to target: 16.5%

Source: Morgan Stanley

2. Public Service Enterprise Group

Ticker: PEG

Sector: Utilities

Price target: $67

Upside to target: 23.1%

Source: Morgan Stanley

1. Exelon

Ticker: EXC

Sector: Utilities

Price target: $58

Upside to target: 41.5%

Source: Morgan Stanley