Value stocks offer stability for investors by focusing on companies that seem underpriced compared to their actual worth. This approach involves looking for stocks with strong fundamentals and growth potential. By investing in these stocks, investors can achieve significant returns once the market recognizes their true value.
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One way to identify value stocks is by comparing a company’s price-to-earnings (P/E) ratio with industry averages or its historical P/E ratios. This ratio compares a company’s stock price to its earnings per share. It must be noted that a lower P/E ratio may indicate that the stock is undervalued. Along with this, we have zeroed in on stocks that have received “Strong Buy” ratings from Wall Street analysts.
Here Are This Week’s Stocks
Permian Resources (PR) – This oil and natural gas company acquires, optimizes, and develops high-return assets in the Delaware Basin. It has a Strong Buy analyst consensus rating and an average price target of $18.06, implying a 45.82% upside potential from the current levels. The company’s P/E of 8.11x reflects a 45.5% discount to the Energy sector’s median of 14.88.
Last week, Piper Sandler analyst Mark Lear raised his price target on PR stock to $21 and maintained a Buy rating ahead of Q3 earnings. The analyst updated estimates across his E&P coverage as investor focus shifts to oil sentiment, gas demand from data centers, capital efficiency, and M&A trends.
AXIS Capital (AXS) – AXIS Capital is a global provider of specialty insurance and reinsurance products and services. Its average price target of $116.59 implies a 30.53% upside potential from the current levels. AXS stock has a Strong Buy consensus rating. Trading at a P/E of 8.64x, the company is valued 32.3% below the Financial sector’s median multiple of 12.77.
AXS stock is down about 2% on Tuesday. The company is scheduled to report its third-quarter results on October 29. Analysts expect the company to report earnings of $2.94 in Q3, up 8.5% from the same quarter last year. Meanwhile, analysts project revenues of nearly $1.6 billion versus $1.58 billion in the year-ago quarter.
Chemed (CHE) – This healthcare company provides hospice and palliative care services through VITAS and plumbing services through Roto-Rooter. It has a Strong Buy analyst consensus rating and an average price target of $578.50, implying a 32.77% upside potential from the current levels. With a P/E ratio of 22.45x, the stock is priced at an 18.1% discount to the Healthcare sector’s median of 27.41.
The company is scheduled to report its third-quarter results today, after the market closes. Analysts expect Chemed to report earnings of $5.37 in Q3, down about 5% from the same quarter last year.
What Is TipRanks’ Smart Value Newsletter?
TipRanks’ Smart Value Newsletter helps investors identify high-potential value stocks with strong fundamentals and long-term growth potential, based on TipRanks’ data and analysis. The newsletter, published weekly, includes macroeconomic, market-wide, and company-specific analysis to help investors understand the trends that affect value investing.
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