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Stocks could be in trouble as they trade at record levels with signs of a U.S. economic slowdown emerging — leading Morgan Stanley to recommend clients scoop up cash-rich companies that can ride out a downturn. “Companies with ample free-cash flow are self-financing and may better withstand any deeper corrections in the market,” Morgan Stanley analysts said Tuesday in a note to clients. Free-cash flow is the money that remains in a company’s coffers after operating expenses and capital expenditures are covered. Businesses may allocate those leftover funds toward growing their operations or paying down their debt, among other uses. Morgan Stanley’s endorsement of such companies comes as new data points to trouble ahead for the U.S. economy. The Bureau of Labor Statistics on Friday reported just 22,000 jobs were created in August — far fewer than expected. A preliminary annual benchmark revision estimate of U.S. payrolls data showed 911,000 fewer jobs were added for the year ending on March than initially reported. Unemployment also rose to 4.3% last month, its highest level in nearly four years. However, companies with ample cash on hand have the ability to continue deploying funds effectively to sustain their growth, even amid difficult market conditions. The bank screened for Russell 1000 constituents — excluding real estate, financials and utilities — that met the following criteria: Cash-to-enterprise value greater than 5% Free cash flow expected to grow more than 10% in each of the next two years Expected return on invested capital of more than 7.5% in each of the next two years Here are some of the names that made the cut for Morgan Stanley. DoorDash DoorDash’s free cash flows are expected to grow 26.6% this year and 41.5% in 2026, per Morgan Stanley. The company has also seen a strong total return of more than 55%. The food-delivery application’s growing cash reserves comes as the Uber competitor sees robust sales growth, including an uptick in subscriptions to its premium DashPass service. The company clocked nearly $3.3 billion in the second quarter of 2025, marking a 25% increase from the year-prior quarter. Spotify Spotify is expected to grow its free cash flows by 27.6% in 2025 and 34.3% in the following year, according to Morgan Stanley. The company has returned more than 54% for the year to date. The audio-streaming platform has amassed a sizable free cash flow due to its strong revenue growth, a figure that has been boosted by the company’s swelling active user base in recent financial quarters. Spotify’s revenue came in 10% higher for the second quarter of 2025 compared to the year-prior quarter, according to its financial statement. FedEx FedEx’s free cash flows are predicted to grow 31.4% and 14.9% in 2025 and 2026, respectively, according to Morgan Stanley analysts. The company’s cash reserves have swelled despite its mixed second-quarter earnings report as it continues to pursue the spinning out of its freight business . The shipping giant has lost nearly 19% this year. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
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