Too cheap? 18 stocks with single-digit P/Es that are expected to rally
This year’s relentless market sell-off may have made some stocks way too cheap, based on certain metrics. The S & P 500 is down 22% year to date, trading squarely in bear market territory, as concern over high inflation and rising interest rates has pressured the market. Still, there are some parts of the market where the selling may be overdone, creating buying opportunities in stocks that could rally going forward. To find these names, CNBC Pro screened for S & P 500 stocks that meet the following criteria: A forward price-to-earnings ratio, which looks at estimated earnings for the next 12 months, of less than 10 Earnings per share growth expectations of 10% or more this year Upside to consensus price target of 10% or more Here are the 18 names that made our list: Ford is among automakers feeling whiplash as consumers shift away from big-ticket items like cars as Covid-19 measures are rolled back in full and inflation cools spending. Last week, UBS downgraded the stock to sell from neutral, noting that the industry is starting to see oversupply after nearly three years of booming demand. Shares are down 41.6% this year, but analysts see upside of 26.5% on average, FactSet data shows. The stock is trading at a forward price-to-earnings ratio of 6.5, and analysts expect Ford’s earnings to grow by 24.5% this year. Pfizer also made the list. The stock is trading at a forward price-to-earnings ratio of 7.9, and analysts see upside of more than 27% on average. Pfizer shares have fallen more than 26% in 2022. Analysts at Cantor Fitzgerald recently reiterated their overweight rating on the stock, noting : “We have also extended our model from 2028E to 2035E and included sales from Biohaven in 2023E and beyond. This shows the earnings potential of Pfizer beyond the loss of exclusivity of key drugs through the end of the decade. We believe this is still underappreciated.” Another name that made our list is Fox, which has caught investors’ eyes recently after it announced the formation of a committee looking at potentially reuniting with News Corporation – which is also owned by Rupert Murdoch. While supporters have pointed out the money-saving measures, some have questioned how it would make sense for shareholders after the two companies broke apart nearly a decade ago as a means to bring more value. Fox shed has nearly 7% this week on the news, but the stock is trading at a multiple of just 8.6, and analysts on average think the stock could rally 33.6%.
This year’s relentless market sell-off may have made some stocks way too cheap, based on certain metrics. The S & P 500 is down 22% year to date, trading squarely in bear market territory, as concern over high inflation and rising interest rates has pressured the market. Still, there are some parts of the market…
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