5 Undervalued Stocks to Buy in This Market
There are high-quality, low-priced opportunities in this market, but you need to know where and how to look. Here are five undervalued stocks to buy right now.
Stocks have managed to climb a growing "wall of worry" so far in 2026, rising despite some of the same potential impediments from 2025 plus some more.
Despite lingering tariffs and inflation, as well as a sluggish economy and expanding war, major equity indexes are on pace to deliver above-average returns again this year.
You're happy to hear that if you're fully invested. But it sounds problematic if you're sitting with cash on the sidelines and want to go shopping for deals. Right?
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Not exactly.
The S&P 500 still trades at a forward P/E ratio of almost 20, still elevated compared to historical price-to-earnings norms.
But that's down from last year's highs, thanks largely to expansion on the earnings side of the equation.
And if we look at a metric that factors in growth – specifically, the price/earnings-to-growth (PEG) ratio – the S&P 500 actually looks like a steal.
PEG is a simple metric. A value above 1 indicates a stock is overpriced, and a value below 1 indicates it's underpriced. The S&P 500, sitting at 1.4 about a year ago, is trading at a lean PEG of 0.8.
And we shouldn't forget mid-cap stocks and small-cap stocks. Valuations for both groups have climbed after trending well below ratios for large-cap stocks for more than 15 years. And a collective P/E around 16 remains modest.
Put simply: Despite what the broader market's run might indicate, there are still plenty of undervalued stocks to buy right now.
Our methodology for finding the best undervalued stocks
When you explore a market made up of thousands of stocks, it helps to narrow that universe into a digestible group of potential picks.
Variety is not just the spice of life. It's also a good way to keep your portfolio balanced.
So we aimed to name five stocks from five different sectors as defined by S&P Global. The resulting group represents a blend of growth and value, as well as dividend stocks.
And we focused on four traits to identify the best undervalued stocks.
A consensus Buy rating: The stock must have an average broker recommendation of 2.5 or lower within S&P Global's rating conversion system.
That system converts analysts' ratings into a numerical scale. Anything with a score of 2.5 or lower is considered a Buy.
We only chose stocks with a rating of 2.0 or lower, ensuring that we're only dealing with higher-conviction consensus Buys.
A forward P/E below the sector average: For what it's worth, every stock on this list is cheaper than the S&P 500 based on forward P/E.
But we also wanted to ensure that these stocks were considered inexpensive relative to similar companies, too.
A PEG below 0.8: Again, a PEG above 1.0 indicates a stock is overvalued, and a PEG 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. If you do choose to compare, it's a fairer standard because it accounts for growth.
By setting a bar below the S&P 500's PEG, we ensure these stocks are nominally cheap, but also relatively cheap.
Positive year-to-date price growth: There's nothing wrong with buying a battered stock. You can find plenty of value in equities that have lost ground.
Here we focus on stocks that are undervalued despite at least treading water so far in 2026.
And, just because they have low valuations doesn't mean they're traditional value stocks. Indeed, a few are excellent examples of growth at a reasonable price, or "GARP."
So you should be able to find something that appeals to you and your investing style.
Here are five undervalued stocks to buy in this market.
Charles Schwab
- Sector: Financials
- Market value: $189.8 billion
- Forward P/E: 15.1
- PEG: 0.75
- Dividend yield: 1.2%
Most people reading this will be plenty familiar with "Chuck."
Charles Schwab (SCHW) is a wide-ranging financial firm best known for its brokerage and wealth management services, as well as its investment funds. But it also provides an array of banking products, including checking and savings, mortgage loans, home equity lines of credit (HELOCs) and more.
SCHW shares have underperformed the broader market so far this year, bogged down in part by the February launch of an AI tax-planning tool by Altruist that sent several wealth-management stocks lower.
Still, Schwab is currently on the rebound, and its high-single-digit YTD gain is a couple of points better than the average for financial stocks.
Jefferies analysts, who rate shares at Buy, recently talked with management and came away optimistic about the company's ability to continue growing in wealth management and advisory.
"SCHW sees advice and managed portfolios as underpenetrated and a strategically important growth opportunity," they say. "Paid advice currently covers ~5% of retail households, vs a base where over 30% say they’d be willing to pay for it. Within this market, SCHW sits at just 2% of a ~$37 trillion advice market, representing a significant runway for growth."
Morgan Stanley's Michael Cyprys (Overweight, equivalent of Buy) agrees: "[We] believe the valuation discussion should increasingly shift away from concerns surrounding AI-enabled cash optimization toward how investors should value a scaled and growing wealth platform with multiple monetization engines."
Right now, investors appear to be undervaluing it. SCHW trades at 15.1 times earnings estimates, a hair below the financial sector and well below the market; its PEG of 0.75 also indicates the stock is selling on the cheap.
That value proposition has most of Wall Street in Schwab's bull camp. The stock enjoys 18 Buys versus three Holds and a Sell. Analysts also see the company growing its bottom line by 20% annually on average over the next three to five years.
Travel + Leisure
- Sector: Consumer discretionary
- Market value: $4.6 billion
- Forward P/E: 9.0
- PEG: 0.48
- Dividend yield: 3.2%
Travel + Leisure (TNL) is a travel and hospitality company that operates under a pair of segments: Vacation Ownership, and Travel and Membership.
The former sells vacation ownership interests (VOIs) and provides related consumer financing under a variety of brands, including Club Wyndham, WorldMark, Margaritaville Vacation Club and more. The latter is a compilation of travel businesses including vacation exchange, travel memberships, direct-to-consumer rentals and more.
If you're wondering about the magazine, T+L owns the trademark rights, but People Incorporated (PPLI) publishes it.
TNL shares have delivered a lackluster mid-single-digit return for the YTD, hampered in large part by a steep April drop despite reporting Street-beating earnings, increasing its dividend by 7%, and putting the pedal down on stock repurchases.
Those latter two facts point to one of Travel + Leisure's greatest strengths: It's a cash-flow machine.
"The company generates significant cash flow, with [an estimated] 2027 FCF yield of 11.8% as of tonight’s close," Stifel analysts wrote in late June. "The team pointed out to investors that 80%-90% of this FCF is returned to shareholders via share repurchases and dividends.
"As a testament to the company's share repurchase volumes, management highlighted that since the company’s spin, the share count has been reduced by ~40%. Additionally, the company pays a well-covered $0.60 quarterly dividend."
This is an exceedingly well-liked stock among the analyst set, with 11 Buys versus one Hold and zero Sells, putting TNL among the best consumer discretionary stocks you can buy.
And while its forward P/E is less than half that of the sector, it's not just a value play – the Street is expecting average annual earnings growth of 19% over the long term.
United Airlines Holdings
- Sector: Industrials
- Market value: $41.0 billion
- Forward P/E: 9.2
- PEG: 0.52
- Dividend yield: N/A
Airline stocks have had to maneuver through a lot of turbulence in 2026, including America's war on Iran sending fuel prices to the moon earlier this year.
But the industry is back on the bounce, and United Airlines Holdings (UAL) is among Wall Street's favorite ways to play the business.
United is among the world's largest airlines by numerous industry metrics, including available seat miles, revenue seat miles, employees, fleet size and available destinations.
It's currently several years into a company-wide upgrade, dubbed "United Next," in which it is upgrading cabins and amenities while leaning on larger, more fuel-efficient aircraft. And that strategy continues to pay off.
Morgan Stanley's Ravi Shanker (Overweight) wrote "we would be buyers of any dip in UAL" following the company's second-quarter earnings report in mid-July. Management reported strength across numerous revenue segments, including Basic Economy, loyalty, premium, cargo and contracted business.
United currently trades at just more than 9 times earnings estimates and a PEG of 0.52, "low multiples that, in our opinion, inadequately reflect the company's plans to replace older and less fuel-efficient planes with more-efficient new models," adds Argus Research analyst John Staszak (Buy).
Shanker and Staszak are two of 23 Buy calls on the industrial stock, which is also expected to grow its bottom line by the high teens over the next few years.
Contrast that with just two Holds and no Sells, and UAL looks like one of the best undervalued stocks to buy now.
Smurfit Westrock
- Sector: Materials
- Market value: $26.0 billion
- Forward P/E: 17.1
- PEG: 0.54
- Dividend yield: 3.7%
If it fits, it ships … in something Smurfit Westrock (SW) has made. Smurfit is a global provider of containerboard, corrugated containers and other paper-based packaging products.
This materials stock is a natural beneficiary of worldwide growth in e-commerce. The more we purchase goods not in stores but via online orders that come directly to us in individual packaging, the more need for what Smurfit delivers.
Conversely, dampening consumer demand can weigh on the company – not just through orders, but also theoretically Smurfit's ability to raise prices to counter the impacts of inflation. Good news on that front:
"Last year, investors frequently pushed back on our SW buy call, arguing that weak or negative industry volumes would mean price hikes would not materialize," writes UBS analyst Andy Jones, who rates SW at Buy.
The analyst also notes that SW is enjoying the benefits of $100 per ton of containerboard price hikes YTD, with more hikes in process. "We think it is now clear that a highly consolidated producer base that has been able to push operating rates to 95% after 10% capacity cuts last year is able to push prices up if needed," Jones concludes.
Smurfit's stock is up nearly 25% YTD, yet it's still extremely attractive on a valuation basis. In fact, SW isn’t just underpriced at a 17.1 forward P/E and 0.54 PEG.
It's also one of the best growth stocks around, too, with analysts projecting 31% long-term average annual earnings growth for the containerboard giant. It's also a Wall Street favorite: Smurfit's 17 covering analysts unanimously agree that this GARP stock is a Buy.
For good measure, Smurfit offers a generous dividend and yields three times more than the broader market.
Neurocrine Biosciences
- Sector: Healthcare
- Market value: $15.2 billion
- Forward P/E: 14.0
- PEG: 0.33
- Dividend yield: N/A
When we think of healthcare bargains, we're likely to think about fields such as medical insurance and hospitals. But Neurocrine Biosciences (NBIX) is an uncommon value out of the high-growth biopharmaceutical space.
Neurocrine develops and markets treatments for a wide variety of neurological, psychiatric, endocrine and immunological disorders. Highlighting its deep product line are:
- Ingrezza (tardive dyskinesia and chorea associated with Huntington’s disease);
- Orilissa (endometriosis);
- Oriahnn (uterine fibroids);
- Crenessity (congenital adrenal hyperplasia); and
- Vykat XR (hyperphagia associated with Prader-Willi syndrome).
Ingrezza is Neurocrine’s primary moneymaker, with its $716 million in Q2 sales accounting for 75% of the company’s revenues. But other drugs are beginning to step it up.
"What's striking to us in the 2Q26 report is the diversity in NBIX's revenue. Crenessity and a partial quarter of Vykat XR revenue combined for [more than] $200 million and represents meaningful diversification beyond Ingrezza," say Wedbush analysts Laura Chico and Thomas Yip, who rate NBIX at Outperform (equivalent of Buy).
There is risk here. Prader-Willi experts recently said the drug was connected to serious adverse events, including seven deaths, though they didn’t find a causal link. Still, "while not directly linked to Vykat XR, potentially increased physician caution around prescribing and risk of regulatory scrutiny could limit uptake and constrain the product launch in coming quarters," says BMO Capital Markets analyst Evan Seigerman (Market Perform, equivalent of Hold).
Overall, Wall Street remains overwhelmingly bullish on NBIX shares, at 23 Buys against four Holds and no Sells, and a 40% average annual long-term earnings growth estimate.
The recent Vykat-triggered dip in shares, meanwhile, has brought Neurocrine's valuation well below the average for healthcare stocks.
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