As of Friday, Aug. 12, the following stocks look undervalued by the market as their price-earnings ratios without non-recurring items trade below 20 while their price-earnings to growth (PEG) ratios trade near or below 1.
Furthermore, Wall Street sell-side analysts have issued positive recommendation ratings for them, which indicates these stocks are expected to trade higher over the coming months.
XP Inc.
The first company that makes the cut is XP Inc. (XP, Financial), a São Paulo, Brazil-based provider of capital market services and financial products to Brazilian corporate clients, fixed income issuers, institutional clients and high net worth clients. The company also provides online financial education and operates the XP platform that allows clients to access investment products in the market. The company was founded in 2001.
As of Friday, the price-earnings ratio without NRI is 15.85, which is less compelling than the industry median of 13.95, but the PEG ratio of 0.37 is more compelling than the industry median of 1.05.
On Friday, the closing price was $19.69 per share. The stock has dropped by 57.3% over the past year for a market capitalization of $11.03 billion and a 52-week range of $16.97 to $53.08.
Wall Street sell-side analysts issued a median recommendation rating of overweight and an average target price of approximately $32.86 per share for the stock.
Target Corp
The second company that meets the criteria is Target Corp. (TGT, Financial), a Minneapolis-based operator of approximately 2,000 discount stores in the U.S. where consumers can find a large assortment of consumer defensive goods, including groceries, apparel, home products, toys and electronics.
As of Friday, the price-earnings ratio without NRI is 14.30, which is more appealing than the industry median of 16.23, while the PEG ratio of 1.02 has more appeal than the industry median of 1.21.
The closing price on Friday was $172.48 per share after falling 34.46% over the past year. The market capitalization is $79.98 billion and the 52-week range is $137.16 to $268.98.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock and have established an average target price of $184.78 per share.
EOG Resources Inc.
The third company that qualifies is EOG Resources, Inc. (EOG, Financial), a Houston, Texas-based explorer and miner of crude oil, natural gas and natural gas liquids. The mineral operations are in New Mexico, Texas and the Republic of Trinidad and Tobago. The company currently has an estimated total of approximately 3.75 million barrels of oil equivalent in net proven reserves. It was previously known as Enron Oil & Gas Company and was founded in 1985.
As of Friday, the price-earnings ratio without NRI is 11.74, which is a little less compelling than the industry median of 10.17, but the PEG ratio of 0.66 is more compelling than the industry median of 1.07.
The closing price on Friday was $114.49 per share, reflecting a 72.68% increase over the past year for a market capitalization of $67.10 billion and a 52-week range of $62.81 to $147.99.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock and have established an average target price of $147.32 per share.
Lennar Corp
The fourth company that qualifies is Lennar Corp. (LEN, Financial), a Miami, Florida-based homebuilder. The company's residential construction activities include the construction and sale of single-family and detached houses, as well as the purchase, development and sale of residential land and multi-family housing. It also offers financing, insurance and investment activities. It primarily serves first-time buyers, move-up and active adult buyers and luxury home buyers.
As of Friday, the price-earnings ratio without NRI is 6.04, which is more compelling than the industry median of 7.87, and the PEG ratio of 0.27 is also more compelling than the industry median of 0.44.
The closing price on Friday was $88.27 per share, reflecting an 18.84% decrease over the past year for a market capitalization of $25.04 billion and a 52-week range of $62.54 to $117.54.
Wall Street sell-side analysts issued a median recommendation rating of overweight for the stock and have established an average target price of $85.94 per share.
