16 Most Undervalued Large Cap Stocks To Buy According To Analysts

Published on March 24, 2024 at 10:42 am by Fatima Farooq in News, Quantitative Investing

In this article, we will be taking a look at the 16 most undervalued large-cap stocks to buy according to analysts. To skip our detailed analysis of current stock market dynamics, you can go directly to see the 5 Most Undervalued Large-Cap Stocks To Buy According To Analysts.

The Fed’s March Decision

On March 20, Jerome Powell, the Chairman of the US Federal Reserve, spoke at a press conference where he highlighted the Fed’s interest rate policy moving forward. He noted that the Fed would remain committed to its “dual mandate” to promote “maximum employment and stable prices” to the population of the United States. While Powell spoke about the resilience of the US economy so far in 2024, he also commented on the fact that inflation being reduced is not an assured development for the year as of yet. The Fed’s March decision also highlighted that the Fed would maintain its federal funds rate in the range of 5.25% to 5.5%. Additionally, Powell stated that the Fed will also continue to remain committed to bringing US inflation down to the Fed’s 2% target.

While the Fed meeting this March did not pinpoint any month for potential rate cuts this year, many financial professionals expect the first rate cut of 2024 to come in June. Additionally, the Fed is currently anticipating a total of three rate cuts this year, though this may be subject to change depending on external factors influencing the state of the US economy. Chairman Powell noted in the March press conference that high interest rates also impacted business investment in the US throughout 2023. Considering this, keeping updated on the Fed’s latest moves in the rate cut department can be vital for investors in the US today.

Investing in Large-Cap Stocks

After the Fed’s announcements, US equities and the S&P 500 rallied to record levels. During times of economic uncertainty, investors may be considering where to put their money to ensure higher returns and profitability for themselves and their portfolios. We believe that a good place to start would be the type of stocks that are well-rounded and renowned in the market, particularly stocks with higher market capitalizations, that is, large-cap stocks. This assumption comes from the fact that these stocks have much to offer to investors, both in terms of market capitalization, which typically ranges from $10 billion to $200 billion in the large-cap bracket and in terms of revenue growth.

By way of example, let’s look at the earnings brought in by some of the stocks on our list below. In the fourth quarter, Uber Technologies, Inc. (NYSE:UBER) had an EPS of $0.66, beating estimates by $0.49, while its $9.9 billion revenue beat estimates by $174.1 million. Intel Corporation (NASDAQ:INTC) brought in an EPS of $0.54, beating estimates by $0.09, while its $15.4 billion revenue beat estimates by $231.1 million. Finally, ServiceNow, Inc. (NYSE:NOW) had an EPS of $3.11 for the fourth quarter, beating estimates by $0.33. The company’s revenue came in at $2.4 billion and beat estimates by $35.3 million. These are merely three examples of the value and potential of large-cap stocks, and yet an even more exciting prospect for investors in today’s market may be the rise of some of the most undervalued stocks in this group since these stocks would offer investors the chance to buy into attractive stock opportunities offering more value than many other stocks in the market. We have thus compiled a list of some of the most undervalued stocks in the market today, including some of the most profitable cheap stocks to buy and some of the most undervalued blue chip stocks to buy.

A portfolio manager studying various stocks and other securities on a tablet.

Our Methodology

We used a stock screener to identify large-cap stocks with market capitalizations between $10 billion and $200 billion and then shortlisted the 16 most undervalued stocks by gathering upside potentials for each stock from TipRanks, as of March 21. The stocks are ranked based on their upside potentials, from the lowest to the highest figure. We also mentioned the number of hedge funds holding stakes in them by using Insider Monkey’s hedge fund data for the fourth quarter. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by over 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

Most Undervalued Large-Cap Stocks To Buy According To Analysts

16. Morgan Stanley (NYSE:MS)

Number of Hedge Fund Holders: 56

Average Analyst Price Target: $98.2

Market Capitalization: $145.1 billion

Upside Potential: 10.5%

Morgan Stanley (NYSE:MS) is an investment banking and brokerage company based in New York. It provides financial products and services to corporations, governments, financial institutions, and individuals.

An Outperform rating and a $97 price target were maintained on Morgan Stanley (NYSE:MS) on March 19 by Oppenheimer analysts.

There were 56 hedge funds long Morgan Stanley (NYSE:MS) in the fourth quarter, with a total stake value of $2.7 billion.

Like Uber Technologies, Inc. (NYSE:UBER), Intel Corporation (NASDAQ:INTC), and ServiceNow, Inc. (NYSE:NOW), Morgan Stanley (NYSE:MS) is among the most undervalued stocks in the large-cap cohort.

15. Intuit Inc. (NASDAQ:INTU)

Number of Hedge Fund Holders: 75

Average Analyst Price Target: $705.6

Market Capitalization: $177.8 billion

Upside Potential: 11.3%

Wells Fargo analysts maintained an Overweight rating and a $725 price target on Intuit Inc. (NASDAQ:INTU) on February 23.

Intuit Inc. (NASDAQ:INTU) is an application software company that provides financial management and compliance products and services. It is based in Mountain View, California, and is among the most undervalued stocks to invest in this year.

We saw 75 hedge funds long Intuit Inc. (NASDAQ:INTU) in the fourth quarter, with a total stake value of $6.9 billion.

L1 Capital mentioned Intuit Inc. (NASDAQ:INTU) in its fourth-quarter 2023 investor letter:

“For the entirety of 2023, the Fund had investments in less than 30 companies. Half of these investments each positively contributed 1.0% or more (in AUD) to the Fund’s returns for 2023. The Fund’s investments in Alphabet, Amazon.com and Microsoft contributed just over a quarter of the Fund’s total gross returns for 2023. Advanced Micro Devices, Booking Holdings, CRH, Eagle Materials, Intuit Inc. (NASDAQ:INTU) and Natural Resource Partners also each contributed over 2% (in AUD) to the Fund’s 2023 returns.

We continued to trim our investment in Intuit as, after strong share price appreciation, we now consider the business to be fully valued. We also fully divested our investment in Analog Devices, again purely due to valuation considerations. We remain very comfortable with the quality of both of these businesses, with Intuit retained as a smaller holding and Analog Devices moving to our Bench of potential future investments. As outlined earlier in this report, our base case view is that there will not be a recession, particularly in the United States. However, growth is slowing, and this will negatively impact demand for many of Analog Devices’ products.”

14. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 63

Average Analyst Price Target: $44.7

Market Capitalization: $167.9 billion

Upside Potential: 11.8%

Verizon Communications Inc. (NYSE:VZ) was spotted in the portfolios of 63 hedge funds in the fourth quarter, with a total stake value of $2.6 billion

Based in New York, Verizon Communications Inc. (NYSE:VZ) is an integrated telecommunication services company on our list of the most undervalued stocks. It engages in the provision of communications, technology, information, and entertainment products and services.

On January 30, Citigroup analysts maintained a Buy rating and a $47 price target on Verizon Communications Inc. (NYSE:VZ).

13. Uber Technologies, Inc. (NYSE:UBER)

Number of Hedge Fund Holders: 129

Average Analyst Price Target: $86.7

Market Capitalization: $161.3 billion

Upside Potential: 11.8%

D E Shaw was the largest shareholder in Uber Technologies, Inc. (NYSE:UBER) at the end of the fourth quarter, holding 14.4 million shares in the company.

Uber Technologies, Inc. (NYSE:UBER) is a passenger ground transportation services company based in San Francisco, California. The company connects consumers with transportation modalities such as ridesharing, carsharing, micro-mobility, rents, public transit, and more.

As of March 15, Piper Sandler analysts maintain a $92 price target and an Overweight rating on Uber Technologies, Inc. (NYSE:UBER).

A total of 129 hedge funds were long Uber Technologies, Inc. (NYSE:UBER) in the fourth quarter, with a total stake value of $8.7 billion.

12. ServiceNow, Inc. (NYSE:NOW)

Number of Hedge Fund Holders: 91

Average Analyst Price Target: $851.3

Market Capitalization: $155.4 billion

Upside Potential: 12.2%

ServiceNow, Inc. (NYSE:NOW) is a systems software company on our list of the most undervalued stocks. It is based in Santa Clara, California, and provides end-to-end intelligent workflow automation platform solutions for digital businesses.

In total, 91 hedge funds were long ServiceNow, Inc. (NYSE:NOW) in the fourth quarter, with a total stake value of $5.7 billion.

Keybanc analysts hold a $1000 price target and an Overweight rating on ServiceNow, Inc. (NYSE:NOW) as of March 21.

Baron Funds said the following about ServiceNow, Inc. (NYSE:NOW) in its fourth-quarter 2023 investor letter:

“ServiceNow, Inc. (NYSE:NOW) offers cloud-based solutions that improve workflow efficiency through automation and digitalization. The stock rose 26.4% in the fourth quarter, finishing the year up 82.0%. Stock appreciation was supported by strong quarterly results above expectations with 24.5% year-over-year subscription revenue growth in constant currency and 30% non-GAAP operating margins despite ongoing macro complexities. In addition, the stock benefited from growing investor expectations that the company would benefit from the integration of GenAI technology into its products, and a rise in software stocks more broadly. Management noted that key business drivers included strong traction with government customers, improving momentum with new customers, and budget consolidation into platforms like ServiceNow. In addition, the company launched its GenAI-supported product line, sold under a new higher-priced Pro Plus sku, at the end of the quarter and has already signed on multiple customers with hundreds more in the pipeline. The new product line should generate material efficiencies for customers as it improves their ability to automate and digitize, and hence we expect broader adoption of the Pro Plus sku, creating an additional growth engine for ServiceNow, supporting the company’s long duration of growth.”

11. Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders: 79

Average Analyst Price Target: $31.2

Market Capitalization: $156.2 billion

Upside Potential: 13.1%

An Overweight rating and a $45 price target were maintained on Pfizer Inc. (NYSE:PFE) on March 4 by Cantor Fitzgerald analysts.

At the end of the fourth quarter, 79 hedge funds were long Pfizer Inc. (NYSE:PFE), with a total stake value of $2.2 billion.

Pfizer Inc. (NYSE:PFE) is a pharmaceutical company based in New York, and is among the top most undervalued stocks to buy. It discovers, develops, manufactures, markets, and distributes medicines and vaccines in various therapeutic areas, such as cardiovascular metabolic, migraine, and women’s health.

Diamond Hill Capital said this about Pfizer Inc. (NYSE:PFE) in its fourth-quarter 2023 investor letter:

“Among our bottom contributors in Q4 were BorgWarner and Pfizer Inc. (NYSE:PFE). Biopharmaceutical company Pfizer was pressured as COVID sales were slower than expected in Q4. However, outside COVID-related sales, the base business is performing as expected, and the company is starting a cost-cutting program that should restore margins to pre-pandemic levels. We continue to like Pfizer for its diversified business, strong cash flow generation capabilities and balance sheet, and solid leadership under a quality CEO.”

10. Intel Corporation (NASDAQ:INTC)

Number of Hedge Fund Holders: 86

Average Analyst Price Target: $47.2

Market Capitalization: $175.1 billion

Upside Potential: 13.5%

In the fourth quarter, 86 hedge funds were long Intel Corporation (NASDAQ:INTC), with a total stake value of $4.3 billion.

On January 26, Mizuho analysts reiterated a Buy rating and $55 price target on Intel Corporation (NASDAQ:INTC).

Intel Corporation (NASDAQ:INTC) is a semiconductor company on our list of the most undervalued stocks. It is based in Santa Clara, California, and it develops computing and related products and services worldwide.

Orbis Investment Management made the following comments about Intel Corporation (NASDAQ:INTC) in its fourth-quarter 2023 investor letter:

“Or how the thick margin of safety at Intel Corporation (NASDAQ:INTC), backed by listed stakes and real saleable assets, compares to the slim margin for error at Nvidia, trading at 13 times next year’s projected revenue. That revenue that could be competed away over time, while Intel’s semiconductor “fabs” in the US are increasingly valuable as the east and the west drift further apart.”

9. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 59

Average Analyst Price Target: $137.9

Market Capitalization: $142.8 billion

Upside Potential: 13.8%

Eagle Capital Management was the most prominent shareholder in ConocoPhillips (NYSE:COP) at the end of the fourth quarter, holding 13.3 million shares in the company.

Piper Sandler analysts maintained a $133 price target and an Overweight rating on ConocoPhillips (NYSE:COP) on March 14.

Based in Houston, Texas, ConocoPhillips (NYSE:COP) is an oil and gas exploration and production company. It explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids.

ConocoPhillips (NYSE:COP) had 59 hedge funds long its stock in the fourth quarter, with a total stake value of $3.7 billion.

8. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 64

Average Analyst Price Target: $126.5

Market Capitalization: $192.9 billion

Upside Potential: 14.3%

Abbott Laboratories (NYSE:ABT) is a healthcare equipment company based in North Chicago, Illinois. The company discovers, develops, manufactures, and sells generic pharmaceuticals, laboratory and transfusion medicine systems, and is among the most undervalued stocks to buy today.

On February 14, RBC Capital analysts reiterated an Outperform rating and a $128 price target on Abbott Laboratories (NYSE:ABT).

Our hedge fund data for the fourth quarter showed 64 hedge funds long Abbott Laboratories (NYSE:ABT), with a total stake value of $2.5 billion.

This is what Polen Capital said about Abbott Laboratories (NYSE:ABT) in its fourth-quarter 2023 investor letter:

“Abbott Laboratories (NYSE:ABT), a globally dominant healthcare business serving a broad range of end markets, was another position we added to in the period. The stock has come under pressure in recent quarters as the company has experienced a significant (and expected) decline in sales tied to pandemic-era COVID testing. However, we feel this amounts to little more than a distraction, as the core business continues to perform very well. Nothing has changed around our expectations for long-term growth, yet the stock’s valuation has compressed, making for an attractive opportunity to add to the position given the long-term durable growth profile of this business.”

7. Amgen, Inc. (NASDAQ:AMGN)

Number of Hedge Fund Holders: 69

Average Analyst Price Target: $312

Market Capitalization: $144.9 billion

Upside Potential: 15.3%

Two Sigma Advisors was the largest shareholder in Amgen, Inc. (NASDAQ:AMGN) at the end of the fourth quarter, holding 1.2 million shares in the company.

Amgen, Inc. (NASDAQ:AMGN) was seen in the 13F holdings of 69 hedge funds in the fourth quarter, with a total stake value of $1.8 billion.

Based in Thousand Oaks, California, Amgen, Inc. (NASDAQ:AMGN) is a biotech company on our list of the most undervalued stocks. It discovers, develops, manufactures, and delivers human therapeutics worldwide.

A Buy rating and $350 price target were reiterated on Amgen, Inc. (NASDAQ:AMGN) on February 8 by Goldman Sachs analysts.

6. T-Mobile US. Inc. (NYSE:TMUS)

Number of Hedge Fund Holders: 75

Average Analyst Price Target: $186.7

Market Capitalization: $190.5 billion

Upside Potential: 16.2%

There were 75 hedge funds long T-Mobile US, Inc. (NYSE:TMUS) in the fourth quarter, with a total stake value of $3.8 billion.

RBC Capital analysts hold an Outperform rating and a $184 price target on T-Mobile US, Inc. (NYSE:TMUS) as of March 20.

T-Mobile US, Inc. (NYSE:TMUS) is a wireless telecommunication services company based in Bellevue, Washington. The company provides mobile communications services.

Like Uber Technologies, Inc. (NYSE:UBER), Intel Corporation (NASDAQ:INTC), and ServiceNow, Inc. (NYSE:NOW), T-Mobile US, Inc. (NYSE:TMUS) is among the most undervalued stocks to buy now.

Click to continue reading and see the 5 Most Undervalued Large-Cap Stocks To Buy According To Analysts.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on October 30, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

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Should I put my money in Artificial Intelligence?

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Click to continue reading…

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