The S&P 500 has performed very well so far in 2024, and many stocks are now trading at or near all-time highs. However, there are still plenty of high-quality stocks trading at attractive valuations. If the Federal Reserve can avoid a hard landing for the economy, these value investing opportunities may not last for long. But if inflation and elevated interest rates ultimately trigger a recession, value stocks may be the best way to play defense against a stock market downturn.
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Here are seven undervalued stocks recommended by CFRA with forward earnings multiples of less than 15:
| Stock | Forward P/E ratio as of March 19 |
| JPMorgan Chase & Co. (ticker: JPM) | 11.9 |
| Merck & Co. Inc. (MRK) | 14.2 |
| Comcast Corp. (CMCSA) | 10.3 |
| Philip Morris International Inc. (PM) | 14.9 |
| Amgen Inc. (AMGN) | 13.9 |
| Morgan Stanley (MS) | 13.7 |
| Goldman Sachs Group Inc. (GS) | 10.9 |
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is one of the world’s largest banks and financial services companies with roughly $3.8 trillion in assets. During the 2023 U.S. regional banking crisis, JPMorgan stepped in to acquire First Republic Bank after it failed and was seized by the Federal Deposit Insurance Corp. Analyst Kenneth Leon says JPMorgan is outperforming peers in most business segments, and it improved its return on equity from 14% in 2022 to 17% in 2023. Leon says investment banking fees will jump in the second half of 2024. CFRA has a “buy” rating and $190 price target for JPM stock, which closed at $192.66 on March 18.
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies. Merck recently reported 6% year-over-year revenue growth in the fourth quarter, including 21% sales growth from leading cancer drug Keytruda. Sales for Merck’s HPV vaccine Gardasil were also up 27%. Analyst Sel Hardy says Merck is well positioned for growth in 2024 following the company’s recent acquisition of Prometheus Bioscience. Hardy says Merck’s cardiology and oncology portfolios are impressive, and the possibility of multiple label expansions for Keytruda and Lynparza could be bullish catalysts for the stock. CFRA has a “buy” rating and $137 price target for MRK stock, which closed at $121.44 on March 18.
Comcast Corp. (CMCSA)
Comcast is a media conglomerate with a diversified portfolio of cable and broadcast television assets, including NBCUniversal, the Peacock streaming service and Universal Pictures. Analyst Keith Snyder says Comcast’s TV and film business recovered in 2023 and its theme parks business is still benefiting from pent-up demand. Snyder says Comcast has pivoted its cable broadband business to focus on a broadband-led connectivity strategy. He says Comcast has financial flexibility to maintain a return on invested capital in at least the high-single-digit-percentage range. CFRA has a “buy” rating and $50 price target for CMCSA stock, which closed at $43.12 on March 18.
[READ: 10 of the Best Stocks to Buy for 2024]
Philip Morris International Inc. (PM)
Philip Morris is the largest publicly traded tobacco company. It also pays an attractive 5.5% dividend, the highest yield on this list. Analyst Garrett Nelson says Philip Morris offers investors an appealing combination of value and income. While global cigarette sales volumes are falling, Nelson says Philip Morris still has opportunities to grow sales in emerging markets and take advantage of its pricing power in mature markets. In addition, he says sales of the company’s heated tobacco product IQOS should continue to be a bright spot. CFRA has a “buy” rating and $100 price target for PM stock, which closed at $95.33 on March 18.
Amgen Inc. (AMGN)
Amgen is one of the world’s largest biotechnology companies. The stock is down 5.2% on a total return basis through March 18 this year, the worst performance on this list. However, Hardy says the weakness is a buying opportunity given the promise of new commercial drugs Tezspire for severe asthma and Lumakras for cancer, as well as the long-term opportunities in Amgen’s drug development pipeline. Amgen completed its largest acquisition to date when it took over Horizon Therapeutics in late 2023, and Hardy says Horizon’s Tepezza, Krystexxa and Uplinza are “first in class” assets. CFRA has a “buy” rating and $352 price target for AMGN stock, which closed at $270.90 on March 18.
Morgan Stanley (MS)
Morgan Stanley is one of the largest U.S. investment banks. Leon says Morgan Stanley is well positioned to benefit from a rebound in merger and acquisition deals, as well as debt and underwriting activity in 2024. He projects Morgan Stanley will return to positive revenue growth this year and says a Fed pivot to interest rate cuts could be a bullish catalyst for the bank in the second half of 2024. Morgan Stanley shares trade at just 13.3 times Leon’s 2024 earnings per share estimate. CFRA has a “buy” rating and $97 price target for MS stock, which closed at $87.96 on March 18.
Goldman Sachs Group Inc. (GS)
Goldman Sachs is one of the world’s leading investment banks and securities companies. Leon says Goldman will also benefit from an improving merger and acquisition environment and a general rebound in the investment banking industry if the Fed cuts interest rates in 2024. In addition, he says Goldman’s strategy of focusing on its core businesses will improve its fee revenue visibility in its asset and wealth management segment. Leon says Goldman may also capitalize on potential pent-up demand from private equity funds looking to exit and monetize certain investments. CFRA has a “buy” rating and $430 price target for GS stock, which closed at $384.37 on March 18.
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7 Undervalued Stocks to Buy Now originally appeared on usnews.com
Update 03/19/24: This story was previously published at an earlier date and has been updated with new information.
