Flying taxis and delivery drones are coming — and these 40 companies are predicted to be the biggest players (TSLA, AMZN, BA)

Airbus taxi

Investment banks like Morgan Stanley are already starting to research the flying car ecosystem of the future.
The bank has put together a list of 40 stocks that are primed to perform when these new technologies take over.
Some names, like Tesla, UPS or Amazon, you might have guessed make the list. Others, like electronics makers and semiconductor companies, are also on the list for their under-the-hood manufacturing.

If you want to invest in automakers, there are plenty of exchange-traded funds that will help you do that.

And for more broad investment themes — like cryptocurrencies or environmental responsibility — there are incredibly specific ETF's built to track a specific idea.

But for something as nascent as flying cars and taxi drones, you may have to build your own portfolio. Luckily, Morgan Stanley has done some of the homework for you in compiling the "Urban Air 50" a group of more than four dozen stocks it says are ready to reap the rewards of a robust urban air transportation network and rollout.

"As part of our collaboration across Morgan Stanley, we have constructed a diversified list of stocks that, in our collective view, are most exposed to the adoption of Urban Air Mobility," the team said in its report. "The list is populated irrespective of specific 12-month recommendations, and, so, includes some Underweight-rated names, in addition to Equal-weight- and Overweight-rated names."

Here’s the full list of 40 names:

Tesla

Sector: Autos & Shared Mobility

"Tesla has expertise in batteries, AI software, complete vehicle engineering, charging infrastructure and material science that we believe may have transfer ability to the autonomous aircraft domain. Tesla CEO Elon Musk is regularly asked about flying cars. While he is sometimes cautious about the near-term commercialization of the product due to noise and wind force, he has been outspoken about his desire to design a vertical-take-off-and-landing supersonic electric jet. Tesla’s increasingly close relationship with SpaceX may also prove useful in this adjacent area of development."

Source: Morgan Stanley

Aptiv

Sector: Autos & Shared Mobility

"Aptiv is a leader in software, sense-and-compute, electronic architecture and hardware integration for autonomous and electric cars. Given the skills overlap between AVs and flying cars discussed throughout this report, we see Aptiv as potentially well positioned in flying cars in a magnitude that we believe exceeds the risk of potential cannibalization. The company has conducted 5,000+ automated rides in Las Vegas, with a 4.96 / 5.00 rating on the Lyft app, and expects to have 75 vehicles in Las Vegas by the end of 2018."

Source: Morgan Stanley

Seating and interior companies

Lear and Adient

Sector: Autos & Shared Mobility

"Seating/interior companies have expertise in the mass production of seats (including seat structures and mechanism/recliners) that are tested to a high level of longevity and crash safety in a rigorous automotive environment.

"In our view, while the absolute unit volume of passenger – carrying flying cars may be quite low for the next 10 to 15 years, the $ value per unit may be substantially higher than for light vehicles - perhaps a significant multiple of content value. Adient has been emphasizing the aerospace opportunity broadly for their seating and interior products. Earlier in 2018, Adient and Boeing launched a new company to design and build airplane seats with the aim to sell a portfolio of products directly to airlines and leasing companies. Lear’s seating portfolio is also well positioned on the theme, in our opinion. "

Source: Morgan Stanley

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