Stocks closed out the first full month of 2026 on a positive note, with all three main indexes back near record highs. That's fantastic news for most investors' current holdings, but it's a lousy break for anyone itching to add a few new positions on the cheap.
Equities' recent run has sent the S&P 500's forward price-to-earnings (P/E) ratio to just above 22 – levels last seen in the COVID bear rebound, and before that, the dot-com bubble burst. So if you're looking for blue-chip values, you're generally out of luck. (Though, as you'll see below, there are still a handful of opportunities.)
Mid-caps and small-cap stocks, meanwhile, remain both nominally cheap, and historically undervalued compared to their large-cap brethren.
Let's take a look at five undervalued stocks to buy now. We tend to think variety isn't just the spice of life, but a good way to keep your portfolio balanced, so each stock has been plucked from a different sector. As a result, this group represents a blend of growth, value and, at times, income.
Our methodology for finding the best undervalued stocks
When exploring the market's thousands of stocks, it helps to start with a screen to narrow down a wide universe into a digestible group of potential picks. Among the traits we sought out for today's bundle of value plays?
A consensus Buy rating: The stock must have an average broker recommendation of 2.5 or less within S&P Global Market Intelligence's ratings scale.
S&P Global Market Intelligence converts analysts' ratings into a numerical scale. Anything with a score of 2.5 or less is considered a Buy. We only chose stocks with a rating of 2.0 or less, ensuring that we're only dealing with higher-conviction consensus Buys.
Forward P/E below the sector average: For what it's worth, every stock on this list is cheaper than the S&P 500 by forward P/E. But we also wanted to ensure that these stocks were considered inexpensive relative to similar companies, too.
PEG below 1.0: Price/earnings-to-growth (PEG) is another valuation metric that doesn't just evaluate the stock's price in a bubble, but in relation to its earnings-growth prospects.
In a nutshell: A PEG of 1.0 indicates a stock is fairly valued, above 1.0 indicates it's overvalued and below 1.0 indicates it's undervalued.
We like PEG because it allows you to value a stock without needing to compare it to anything else … but if you choose to compare it to anything else, it's a fairer standard given that, unlike any other valuation metric, it actually accounts for growth.
The S&P 500 has a PEG of 1.19 right now, which is both nominally overvalued and in line with its long-term range. So these stocks are not only cheap by virtue of how PEG is calculated, but they're also relatively cheap compared to the market.
One-year positive price growth: There's absolutely nothing wrong with picking up a battered stock and dusting it off – you can find plenty of value in equities that have lost ground.
But we wanted to focus on stocks that remain undervalued despite at least treading water (if not making significant gains) over the past 52 weeks.
Importantly: Because these companies sport basement-dwelling valuations doesn't mean they're all traditional value stocks.
A few of these picks are excellent examples of "GARP" (growth at a reasonable price), so investors of various stripes should find something that appeals to their particular style.
US Foods Holding
- Sector: Consumer staples
- Market value: $18.7 billion
- Forward P/E: 17.8
- PEG: 0.93
- Dividend yield: N/A
US Foods Holding (USFD) lagged the broader market in 2025, but its one-year return leads the S&P 500 by roughly 2 percentage points. And so far in 2026, the consumer staples stock is up more than 11%.
Wall Street is optimistic the food delivery firm, whose brands include Stock Yards, Roseli and Chef's Line, will continue this positive price action in the new year.
The average price target among the 17 analysts following USFD who are tracked by S&P Global Market Intelligence is $91.63, representing implied upside of nearly 10% to current levels.
And Jefferies analyst Alexander Slagle has an even higher price target of $95 to go alongside his Buy rating.
Despite some choppiness for foodservice demand to end 2025 due to winter weather and the record-long government shutdown, Slagle says the start of 2026 "has been solid, and should set a favorable tone" going forward.
USFD, in particular, has "some of the best growth visibility in the segment," he adds, thanks to the "clean and simple self-help executing store that is playing out under CEO Dave Flitman and a management team that we think investors believe in."
Micron Technology
- Sector: Information technology
- Market value: $489.9 billion
- Forward P/E: 13.1
- PEG: 0.26
- Dividend yield: 0.01%
Micron Technology (MU) is up fourfold in the past 12 months to trade in record-high territory, but the memory chipmaker still falls in the "undervalued stocks" category. Indeed, its forward P/E ratio of 13.1 arrives well below the broad market's, as does its PEG.
And analysts see plenty of room for growth this year and next. Indeed, Wall Street expects revenue to double in fiscal 2026 and increase nearly 23% in fiscal 2027. Earnings-per-share estimates also reflect expectations for significant expansion.
William Blair analyst Sebastien Naji recently initiated coverage on the semiconductor stock with an Outperform (Buy) rating.
Micron is one of the three major global memory suppliers, he says. "Access to memory has become a key bottleneck in AI racks/systems, increasing demand for more performant, higher bandwidth memory solutions," and this, Naji adds, will allow the company to benefit from significant average-selling-price growth and higher-margin products.
Naji also points out that while MU's share price has been surging in recent years, it's still on the cheap side. "While valuation increasingly embeds significant growth expectations, we believe shares can continue to work on the back of a multiyear, AI-driven product cycle characterized by tight supply."
Citizens Financial Group
- Sector: Financials
- Market value: $27.0 billion
- Forward P/E: 12.3
- PEG: 0.51
- Dividend yield: 2.9%
Financial stocks are among the market's cheapest sectors, trading at a forward P/E of 15.6.
But within that already inexpensive group, large regional bank Citizens Financial Group (CFG) is a truly undervalued stock, trading at a mere 12 times forward earnings estimates.
Citizens Financial Group is the parent of Citizens Bank, which provides a variety of consumer, business, real estate and private banking services.
The bank's 1,000 or so branches and more than 3,100 ATMs serve customers across 14 (predominantly East Coast) states and the District of Columbia, and at last check, it boasted $220 billion in assets.
CFG shares haven't given investors much to cheer about longer term, trailing both Citizen's fellow banks and the broader market over the past three years.
But things are looking up – the stock has outperformed the S&P 500 over the past 12 months, up 38.5% on a total return (price change plus dividends) basis vs the broader market's 16.9% gain. You can thank a business picture that has been looking up of late.
"Our Buy rating is based on our view that CFG's outlook should lead to above-average growth and return metrics (targeting a medium-term ROTCE [return on tangible common equity] of 16% - 18%)," says Jefferies analyst David Chiaverini. "The private bank's profitability has improved nicely to 7% of EPS on its way to 15%, and the 'reimagine the bank' initiative should drive $400 million of gross expense savings over three years."
Chiaverini is one of a gaggle of optimistic analysts – currently, 19 pros say CFG stock is a Buy. That compares to just two analysts on the sidelines at Hold, and no Sells to be found.
That's in large part because of excitement over the company's long-term earnings-growth prospects, which the Street sees coming in at 24% annually.
General Motors
- Sector: Consumer discretionary
- Market value: $76.8 billion
- Forward P/E: 7.0
- PEG: 0.52
- Dividend yield: 0.9%
In late January, General Motors (GM) shot up nearly 9% in a single session after the automaker reported better-than-expected fourth-quarter earnings and said it expects year-over-year earnings-per-share growth of more than 13% at the midpoint in 2026.
What's more, the company announced a 20% increase to its quarterly dividend and said its board of directors approved a $6 billion stock buyback program, equivalent to nearly 8% of its current market cap.
Shares have now generated a total return of more than 71% in the past 12 months – easily outperforming the broader market – but remain extremely undervalued according to GM's forward P/E of 7 and its PEG of 0.52.
The "big picture takeaway" from GM's recent earnings report, says UBS Global Research analyst Joseph Spak, is that GM has "many levers at their disposal to be able to deliver results."
Indeed, the dividend hike and stock buyback "should ease concerns over cash and future cash flow," Spak explains, and boost earnings-per-share upside.
Spak has a Buy rating on GM and a $102 price target, representing implied upside of more than 18% over the next 12 months or so.
Vistra
- Sector: Industrials
- Market value: $9.1 billion
- Forward P/E: 13.6
- PEG: 0.68
- Dividend yield: N/A
Utility stocks have done well over the past year as snowballing demand for all things artificial intelligence increases the need for electricity and power generation. With use cases for AI only expected to expand, the outlook for power providers remains bright.
And the sector remains relatively cheap, trading at a forward P/E of 18. One undervalued stock that stands out among utilities is Vistra (VST), which recently signed a 20-year agreement with Meta Platforms (META) to supply the Facebook parent with the necessary nuclear energy needed to run its AI data centers.
These long-term power agreements for Vistra's nuclear and potentially gas capacity will help drive upside for the shares, say BofA Securities analyst Ross Fowler.
And the company's recently announced $4 billion acquisition of Cogentrix Energy "is another step taken to add generation length in a tightening power market backdrop" across Pennsylvania, New Jersey, Maryland and New England, points out UBS Global Research analyst William Appicelli.
Both analysts have a Buy rating on VST and their respective price targets represent implied upside of more than 40% to current levels.
