New Delhi, June 20 -- Investors may be paying too much for future growth, with stocks carrying lower growth expectations historically delivering stronger returns than those priced for aggressive expansion, according to a Morgan Stanley Counterpoint Global Insights report.

The report, titled "Opportunities and Expectations: The Present Value of Growth Opportunities in Valuation", said investors often attribute a significant portion of a company's valuation to future growth opportunities, but stocks with lower expectations have historically outperformed those with higher expectations.

Explaining its framework, Morgan Stanley said stock prices can be viewed in two parts: the value of a company's existing business and the value of future in...