Several stocks, including an e-commerce play and a major snack maker, appear cheap after the broader market's recent volatility. Investors could take advantage of the opportunity for long-term gains. All three major U.
S. indexes have seen a rebound and are trading above their Aug. 2 closing level, which was the session before the global market-sell off picked up steam.
But many stocks are still way down from their highs and are now sporting more attractive valuations. CNBC searched for S & P 500 stocks that are "cheap" relative to the broader market and that meet the following criteria. Data used was from FactSet.
Forward valuation less than S & P 500's overall forward price-to-earnings ratio of 22.56 Cheap relative to their sector and the broader market Upside to analysts' average price target of 10% or more Has gained 5% or more over the past month Consensus analyst buy or overweight rating Take a look at the list of stocks below: PayPal has the highest potential upside of the group at 23.10%, according to analysts' average price target of $78.
12. The company has a price-to-earnings ratio of 14.1 over the next 12 months, less than that of the broad-market index.
The stock has added more than 7.5% since the start of the year — and 14% this quarter alone, after the company surpassed second-quarter expectations, reviving analysts' enthusiasm for the stock after nearly three years of heavy underperformance. Bernstein analyst Harshita Rawat upgraded shares to outperform on July 31 — the first upgrade from the firm for Paypal since it downgraded the stock to market perform in 2021.
Rawat also raised her price target by $7 to $78, pointing to improving gross profit trends and e-commerce product momentum under PayPal's new management for the change. She predicted there would be a "greater likelihood of steady beats and raises over the coming quarters." Oreo maker Mondelez International is another cheap, yet well-liked, stock among analysts.
The average price target implies shares could gain roughly 13.7%, according to FactSet. Year to date, the stock is down 1.
3%. But it's up more than 9% this quarter off of its second-quarter beat, which was driven by strong gross margins but still reflected lower-than-expected organic growth. Goldman Sachs on Monday named Mondelez among its buy-rated packaged food stocks, as it also began coverage of the sector.
Analyst Leah Jordan wrote to clients in a note that the company should see above-average earnings growth, and said the stock is a high-quality core holding. Jordan's $80 price target is just above the consensus price target of $78.79.
Analysts also think Molina Healthcare , a stock tied to Medicare that's seen pressure this year, could see further growth ahead. The stock, which is down more than 6% this year, could gain another 10.5% over the next year, per the average price target on FactSet.
Shares have already rebounded this quarter after Molina posted better-than-expected quarterly financial results in late July and reaffirmed its strong full-year forecast. Other stocks that could be cheap, long-term winners include toymaker Hasbro , food company Kraft Heinz and insurance company Assurant ..
