3 Bargain Stocks the Market Is Sleeping on Right Now
It’s been a while since investors have been able to buy off the discount rack, but the sudden reversal in U.S. markets over the last quarter has left analysts scrambling to update their earnings projections and year-end index targets. While the usual tech sector suspects have led the rally, the S&P 500 and the NASDAQ Composite have both made new all-time highs this month, and surges in speculative assets like Bitcoin indicate that risk-takers are once again whetting their appetites.
However, the macroeconomic outlook is still murky as President Trump continues to spin the tariff wheel and consumer sentiment remains below levels typically associated with an economic boom.
There’s still room for surprises in this market, and some of the most undervalued stocks could offer unexpected upside.
Uncertainty Leading to Broad Discounting May Be Overdone
It's hard to believe that it's been three months since the Reciprocal Tariffs chart was unveiled in the White House Rose Garden, but market indices have shot straight up since Trump announced a pause on those levies a week later. However, the uncertainty introduced by this tariff policy caused many institutions to drastically reduce expectations for individual stocks and market indices.
Now that the White House has relented on multiple occasions, the market has entered a ‘show, don’t tell’ rally where threats of high tariffs are shrugged off. Even a hesitant Federal Reserve hasn’t spooked markets, as only two cuts at most are expected between now and the end of the year.
However, uncertainty lingers, underscored by fluctuating (but improving) consumer sentiment, persistent inflation above the Fed’s target, and slowing home price growth in previously booming markets.
When conflicting signals emerge, investors often look for stocks trading below their intrinsic value that offer a margin of safety. The following three stocks are well-established names that have taken a beating lately and now trade well below their historical norms, a scenario ripe for value hunters.
Target: Digital Sales Could Spark Turnaround
Few companies had a worse Q1 than Target Corp. (NYSE: TGT), which missed EPS and revenue figures by a substantial margin and saw year-over-year (YOY) revenue decline compared to Q1 2024. Total net sales decreased by 2.8%, and comparable sales declined by 3.8%. TGT shares had already been struggling before the report, but the stock is now down 24% year-to-date, and the decline appears relentless.
Has the company finally hit rock bottom? Its valuation indicates it may be close, as the 11.28 price-to-earnings (P/E) ratio is 32% lower than the 10-year average, and the price-to-sales (P/S) rate of 0.44 is lower than that of its biggest competitor, Walmart Inc. (NYSE: WMT). Comparable digital sales were a bright spot in the earnings release, with robust growth of 4.7% despite the poor store numbers.
Target Circle 360, the company’s same-day delivery service, also demonstrated impressive growth of 36%. If Target’s digital transition is successful, the current valuation could prove incredibly affordable.
Ford: Navigating Tariff Uncertainty
Rocky Balboa once said, “It ain’t about how hard you get hit. It’s about how hard you can get hit and keep moving forward.” That quote has likely circulated around the Ford Motor Company (NYSE: F) executive suite a few times this year as the firm completely pulled its full-year guidance projections for 2025 and faced several questions regarding its EV division and margin pressure from tariffs.
Expectations for Ford can’t get much lower, which is why any upside surprise could catch the market ‘offside’ and cause a quick re-rating. And despite a hurricane of headwinds, there are signs that Ford is beginning to navigate a turnaround.
Ford’s Q1 2025 revenue decreased 6% YOY, but still beat analyst expectations ($40.66 billion vs. the projected $35.99 billion), and EPS numbers were far less dire than anticipated. The company’s anticipated $1.5 billion EBIT tariff hit has probably already been reflected in the current stock price, and analysts have been gradually raising their price targets since May, although most still remain below the current market price.
The company’s commercial Ford Pro division has demonstrated solid growth, and truck and SUV sales continue to increase. The biggest hurdles for Ford moving forward remain an unprofitable EV division and margin pressure from tariffs.
If the company can trim its EV losses and tariff threats remain more bark than bite, Ford’s light valuation (9.46 P/E ratio, nearly 75% below its 10-year historical average) could provide a terrific entry point. And don’t look now, but the stock is up 14% in the last 30 days, and pays a dividend yielding over 5%.
MGM Resorts: Macau Rebound Points to Improving Conditions
Casinos like MGM Resorts International (NYSE: MGM) are always looking for consumer sentiment upticks, and the recent numbers out of Macau indicate that at least gamblers are starting to feel more positive about their financial situations. MGM China has become one of the crown jewels of Macau, with plans to add 200 more gaming tables over the next decade under new regulations, resulting in a 36% increase in capacity.
The company’s Q1 2025 numbers were surprisingly strong, with $0.69 EPS far exceeding the $0.50 per share estimate. Revenue fell 2.4% YOY, but BetMGM saw significant growth with net revenue up 34%. Full-year EPS is expected to decline almost 14% from 2024, but the outlook for 2026 indicates EPS growing to about $2.71 per share, higher than the $2.59 full-year 2024 figure.
The stock is up 16% over the last month and 26% over the previous three months, as investors buy into the MGM rebound story, but it's still trading at a discount to its five-year P/E of 19.99.
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