The tumultuous market has provided an opportunity to grab some of analysts’ favorite stocks on the cheap. After the two-month Covid bear market in 2020, stocks rallied back to new highs before entering another bear market earlier this year. After hitting lows in June, the market has swung back and forth in volatile trading. The result: Almost half of large-cap stocks have given up all the gains they made during the rally after the Covid bear market — and are now below their closing price on Feb. 19, 2020, according to Bespoke Investment Group. With that in mind, CNBC Pro looked for stocks that are in the red since Feb. 19, 2020, and have a current forward price-to-earnings ratio 10% lower than their average forward P/E of the last five years. They are also names that are loved by analysts: they have at least 10% upside to the average price target and at least 60% of analysts rate them a buy. Visa and Mastercard both made the list, trading at about a 22% discount. Visa is down 10% since the market’s February 2020 peak and Mastercard dropped 9%. More than 70% of the analysts covering each name rate them a buy and the stocks have more than 35% upside to their average price targets, according to FactSet. Hedge funds also like Visa and have been quietly adding positions , according to data firm InsiderScore. For instance, Soroban Capital Partners, raised its stake in the payments company by 75% in the second quarter. Meta , down nearly 33% from the market’s pre-Covid peak, is currently trading at a 39% discount and has 48% upside to the average analyst price target, according to FactSet. In July, the social media company formerly known as Facebook reported a steeper-than-expected drop in revenue in the second quarter, missed on earnings and said it was expecting a second straight period of declining sales. Of the analysts who cover the stock, 60% give it a buy rating. Meanwhile, Disney is rated a buy by 72% of the analysts covering it. In a note earlier this month, Morgan Stanley analyst Benjamin Swinburne said he sees the entertainment giant’s park segment driving the majority of free cash flow and earnings before interest, taxes, depreciation and amortization. Also, he expects Disney’s content assets are “under-earning and undervalued.” Disney is trading at a 30% discount and is down nearly 24% since February 2020. In the industrials sector, Boeing stands out with its nearly 57% forward P/E discount. The aerospace company has also plunged 57% since February 2020. Roughly 67% of analysts who cover the stock rate it a buy. Morgan Stanley’s Kristine Liwag is one of those bullish on Boeing and recently reiterated her overweight rating in a Sept. 8 note. “The main takeaway from our analysis is that there is solid demand for aircraft. The strength in demand in narrow body aircraft is already reflected in our 737 MAX estimates,” she wrote.
