Generation Development Group (ASX:GDG) operates in structural growth segments that should deliver higher returns over the medium term, Morgan Stanley said in a Tuesday note.

The company's revenue for its managed accounts segment is expected to grow at a compound annual rate of more than 22% for the next five fiscal years, the investment firm said. The investment bond revenue opportunity for the company by fiscal 2029 is expected to be AU$220 million.

Morgan Stanley expects the company's revenue for its research segment to expand by over 8% for the next five years.

For fiscal 2024 to 2027, the company is expected to increase its earnings per share by more than 31%, according to the note.

The investment firm initiated the investment solutions provider with an overweight rating and a price target of AU$4.75.

The company's shares rose almost 1% in recent Wednesday trade.

Price (AUD): $3.83, Change: $+0.03, Percent Change: +0.78%