Barron’s has assembled a list of 22 top undervalued stocks, including Citigroup (C) - Get Citigroup Inc. Report, Boeing (BA) - Get Boeing Company Report, Southwest Airlines, (LUV) - Get Southwest Airlines Co. Report, T-Mobile US (TMUS) - Get T-Mobile US, Inc. Report, Electronic Arts (EA) - Get Electronic Arts Inc. Report, and PayPal (PYPL) - Get PayPal Holdings, Inc. Report.
The publication selected its stocks from the S&P 500 index, choosing companies that would need to gain 32% to reach analysts’ average price targets. That compares with 10% for the typical S&P 500 stock.
Barron’s further narrowed its choices to companies where at least 60% of the analysts following them offer buy ratings.
The other stocks are Alaska Air (ALK) - Get Alaska Air Group, Inc. Report, Coterra Energy (CTRA) - Get Coterra Energy Inc. Report, Caesars Entertainment (CZR) - Get Caesars Entertainment Inc Report, Generac (GNRC) - Get Generac Holdings Inc. Report, Global Payments (GPN) - Get Global Payments Inc. Report, Hess (HES) - Get Hess Corporation Report, Enphase Energy (ENPH) - Get Enphase Energy, Inc. Report), Activision Blizzard (ATVI) - Get Activision Blizzard, Inc. Report, Tapestry (TPR) - Get Tapestry, Inc. Report, Fidelity National Information Services (FIS) - Get Fidelity National Information Services, Inc. Report, Fleetcor Technologies (FLT) - Get FLEETCOR Technologies, Inc. Report, Paycom Software (PAYC) - Get Paycom Software, Inc. Report, Halliburton (HAL) - Get Halliburton Company Report, Salesforce.com (CRM) - Get salesforce.com, inc. Report, Qorvo (QRVO) - Get Qorvo, Inc. Report, and Match Group (MTCH) - Get Match Group, Inc. Report.
Half the 22 stocks saw price drops last year, and just three outperformed the S&P 500.
Citigroup recently traded at $64.24, up 2%.
Morningstar analyst Eric Compton puts fair value for the New York financial-services giant at $83 and assigns it a narrow moat.
“We expect the bank will continue to trend closer to a $6 billion quarterly run rate for pre-provision pre-tax operating income in 2022, as it awaits some balance sheet growth and rate hikes, after being closer to an $8 billion quarterly run rate pre-pandemic,” he wrote in an October commentary.
“Due to the card and international exposure, we expect Citi’s recovery may be a bit slower than some peers.”