The S&P 500 has performed 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 to buy, according to CFRA, with forward earnings multiples of less than 15:
| Stock | Forward P/E Ratio* | Upside Potential** |
| JPMorgan Chase & Co. (ticker: JPM) | 12.5 | 8.7% |
| Exxon Mobil Corp. (XOM) | 12.6 | 15.3% |
| Merck & Co. Inc. (MRK) | 11.5 | 17.4% |
| Wells Fargo & Co. (WFC) | 9.9 | 25.5% |
| Morgan Stanley (MS) | 13.5 | 20.8% |
| Goldman Sachs Group Inc. (GS) | 12.2 | 11% |
| Comcast Corp. (CMCSA) | 9.1 | 20.9% |
*As of Sept. 25.**As of Sept. 24 close, based on 12-month CFRA price targets.
JPMorgan Chase & Co. (JPM)
JPMorgan Chase is one of the world’s largest banks and financial services companies with roughly $4.1 trillion in assets as of the second quarter. 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., or FDIC. Analyst Kenneth Leon says the investment banking industry is rebounding from a cyclical downturn, and JPMorgan and other banks are facing less global competition for equity secondary offerings, debt underwriting, initial public offerings, and merger and acquisition fees. CFRA has a “buy” rating and $230 price target for JPM stock, which closed at $211.59 on Sept. 24.
Exxon Mobil Corp. (XOM)
Exxon Mobil is the largest U.S. oil major. In addition to its attractive valuation, analyst Stewart Glickman says Exxon Mobil has bullish catalysts in both the short and long term. In the short term, Glickman says Exxon will benefit from development of its properties in Guyana, as well as its enhanced Permian Basin exposure and production targets following its buyout of Pioneer Resources. In the long term, Exxon Mobil could unlock value if its efforts to transition to a more green energy company are successful. CFRA has a “buy” rating and $135 price target for XOM stock, which closed at $117.05 on Sept. 24.
Merck & Co. Inc. (MRK)
Merck is one of the world’s largest pharmaceutical companies. Merck recently reported 7% year-over-year revenue growth in the second quarter, including 16% sales growth from leading cancer drug Keytruda. Sales for Merck’s HPV vaccine Gardasil were up just 1%. Analyst Sel Hardy says Merck will soon start to generate more visible financial contributions from its recent acquisitions, and its growth outlook has improved in 2024. Hardy says the potential to expand the use of Keytruda and Lynparza to a wider range of indications could also be a growth driver. CFRA has a “buy” rating and $135 price target for MRK stock, which closed at $114.96 on Sept. 24.
[READ: 10 of the Best Stocks to Buy for 2024]
Wells Fargo & Co. (WFC)
Wells Fargo is one of the largest U.S. banks, lending mostly within the U.S. market. Analyst Alexander Yokum says Wells Fargo has an attractive buyback program and will continue to improve its efficiency through at least 2025, including prioritizing digital banking services and reducing its physical footprint. While the bank is highly exposed to the struggling commercial real estate market, Yokum says Wells Fargo has done a commendable job in reducing its overall commercial real estate office exposure by 22% in just the past four years. CFRA has a “buy” rating and $68 price target for WFC stock, which closed at $54.16 on Sept. 24.
Morgan Stanley (MS)
Morgan Stanley is one of the largest U.S. investment banks. The company has a 3.6% dividend, the highest yield on this list. Leon says the recovery in investment banking and asset management is in the early stages and will be a multi-year tailwind for Morgan Stanley. He is particularly optimistic about the bank’s exposure to the rebounding merger and acquisition market and the debt and equity underwriting market. Lower interest rates may trigger a higher investor appetite for risk assets in the near future. CFRA has a “buy” rating and $124 price target for MS stock, which closed at $102.58 on Sept. 24.
Goldman Sachs Group Inc. (GS)
Goldman Sachs is one of the world’s leading investment banks and securities companies. Goldman Sachs shares are up by about 28% this year, the best performance of any stock on this list. Leon says Goldman will be a major beneficiary of the rebound in the investment banking industry in 2024 and 2025. In addition, he is bullish on the bank’s strategy of streamlining its business and focusing on durable, recurring fee revenue in its asset and wealth management business. Leon anticipates a ramp up in transaction fees. CFRA has a “strong buy” rating and $553 price target for GS stock, which closed at $498.02 on Sept. 24.
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. Comcast shares have a forward earnings multiple of just 9.1, the lowest of any stock on this list. Analyst Keith Snyder says the integration of Comcast’s NBCUniversal, cable networks and Sky media assets will help improve the conglomerate’s geographic diversification. Despite negative investor sentiment surrounding traditional television assets, Snyder projects at least high-single-digit return on invested capital for Comcast in coming years. CFRA has a “buy” rating and $50 price target for CMCSA stock, which closed at $41.35 on Sept. 24.
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7 Undervalued Stocks to Buy Now originally appeared on usnews.com
Update 09/25/24: This story was previously published at an earlier date and has been updated with new information.
