These S&P 500 stocks are cheap and expected to do well from here

Cheap stocks still remain for investors to buy, despite the equity market persisting near its all-time highs. Strong economic growth and the commencement of an interest rate reduction cycle have propelled stocks to new heights this year, with the benchmark S & P 500 index up 21% in 2024, as of Tuesday’s close. The Dow Jones Industrial Average and technology-heavy Nasdaq Composite have respectively added 12% and 23%. But even though valuations remain generally elevated across the board, that does not mean all stocks are trading at lofty prices. CNBC Pro recently screened data from LSEG to find the stocks in the S & P 500 that are currently priced at a discount and could see outperformance going forward. To be included in the following table, stocks had to meet the following criteria: Trading at a discount to the S & P 500 (have a forward price-to-earnings ratio less than that of the S & P 500) Have a consensus buy rating Have an upside to average price target of at least 15% Have a year-to-date outperformance of at least 20% All data is as of Monday’s close Citigroup , up 21% this year through Monday’s close, was one name on the list. The average analyst price target implies the bank stock could rally an additional 16% from here. Last month, Citigroup reported third-quarter results that topped Wall Street’s estimates on both the top and bottom lines. Following this earnings report, Wells Fargo reiterated the stock at an overweight rating . “Strong 15% EPS beat. Reiterate prior guides. Strong pos. op leverage. Double-digit growth in services (1/4 of firm). CEO seemed to put to rest concerns about escalation of reg issues,” Wells Fargo wrote. Shares of Universal Health Services have climbed 37% in 2024, but the average price target for the health-care solutions provider implies the stock could rally another 20%. TD Cowen upgraded shares to a buy rating from hold in October, citing “materially underappreciated” upside from a state directed payment. “We believe future SDP EBITDA upside is underappreciated by investors, both in terms of durability and magnitude,” wrote analyst Ryan Langston. “The impact from SDP to the hospital narrative is likely to outweigh potential near/intermediate term return to a normalized utilization and cost trend environment in our view.” Langston’s revised price target of $283, up from $220, corresponds to a nearly 36% upside for shares of Universal Health Services. Industrial company 3M has already risen 38% this year but could climb another 15%, according to its average price target. The company posted its third-quarter results in late October, with its earnings of $1.98 per share topping the $1.90 expected from analysts polled by LSEG. 3M’s $6.07 billion in revenue came in just above the forecast $6.06 billion. Other names on the list of cheap but promising stocks included technology titan Alphabet , conglomerate Berkshire Hathaway and airline carrier United Airlines .