In this article, we will be taking a look at the 10 Cheap Stocks With Strong Buy Ratings on Wall Street.
Cheap and undervalued stocks in the U.S. remain one of the most compelling opportunities heading into 2026, as small caps and select low‑multiple names trade at notable discounts despite a strong overall market. As of December 19, 2025, the S&P 500 is up approximately 16.20% year-to-date, trading in the high 6,700s to low 6,800s. This reflects a robust large-cap rally and elevated multiples at the top of the market, while smaller stocks continue to lag in relative valuation terms.
Research from December 2025 indicates that U.S. small‑cap stocks are the most undervalued major segment, trading around a 15% discount to Morningstar’s aggregate fair value. By contrast, large-cap stocks are much closer to fair value. On a forward price‑to‑earnings basis, small caps trade near 14x earnings versus roughly 20x for large caps, implying a 30% discount, the widest spread since the dot‑com era. Even within the S&P 500, screens from November 2025 highlight subsets of “cheap growth” names with below-market multiples but double-digit EPS CAGRs through 2027, demonstrating that mispriced growth exists across the market.
Looking ahead to 2026, market commentary from December 2025 highlights valuation extremes in mega-cap stocks, particularly in tech and growth segments, while smaller, cheaper cyclical stocks appear more attractively valued. Analysts and asset managers expect that, as investors anticipate Fed easing, moderating inflation, and broader earnings growth across sectors, market leadership may rotate toward these undervalued segments. Consensus forecasts point to positive but more modest index-level returns, with potential excess performance coming from strategic tilts toward value, quality, and small-cap stocks rather than broad S&P 500 exposure.
With that being said, let’s take a look at the cheap stocks to buy.
Our Methodology
For our methodology, we selected cheap stocks meeting the following criteria: a price-to-earnings (P/E) ratio below 15, a consensus Buy rating, and coverage by at least 10 analysts. From this pool, we identified the top 10 stocks and ranked them in descending order based on their P/E ratios.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Here is our list of the 10 Cheap Stocks With Strong Buy Ratings on Wall Street.
10. First Horizon Corporation (NYSE:FHN)
PE Ratio: 14.83
First Horizon Corporation (NYSE:FHN) is one of the cheap stocks to buy.
TheFly reported on December 18 that Truist Securities analyst John McDonald maintained a Hold rating on FHN and raised the price target to $26 from $24, reflecting improved fundamentals and management commentary while retaining a cautious stance. The updated target continues to factor in favorable capital return initiatives and better visibility on net interest income and fee income growth.
Other recent analyst actions reinforce a mixed but constructive backdrop. On December 17, 2025, Keefe, Bruyette & Woods (KBW) maintained a Market Perform rating and lifted its price target to $24 from $23, reflecting steady execution. On December 16, 2025, J.P. Morgan reiterated a Neutral/Hold rating while raising its target to $27 from $23, highlighting resilience in earnings power. Additionally, Deutsche Bank initiated coverage with a Buy rating and a $28 price target, noting First Horizon’s attractive valuation and execution.
Operationally, First Horizon Corporation (NYSE:FHN)’s stock reached a one‑year high in mid‑December 2025 following analyst target increases and positive reception to capital return strategies, including the board’s authorization of a $1.2 billion stock repurchase program, equivalent to up to ~11.3% of outstanding shares, signaling confidence in the balance sheet and valuation. The bank also declared a $0.15 quarterly dividend, payable in early January 2026, supporting an attractive yield for income‑oriented investors.
First Horizon Corporation (NYSE: FHN) is a U.S. regional bank holding company based in Memphis, Tennessee, founded in 1864. Through First Horizon Bank, it provides commercial, consumer, and specialty banking, wealth management, and financial services across 12 Southern states, serving both individual and institutional clients.
9. Lear Corporation (NYSE:LEA)
PE Ratio: 14.38
Lear Corporation (NYSE:LEA) is among the cheap stocks to buy.
TheFly reported on December 15 that Citigroup maintained its Buy rating on LEA and raised the price target to $146 from $136, reflecting confidence in the company’s long‑term prospects amid a challenging auto supply cycle. Citigroup’s bullish stance is among the highest Wall Street targets for LEA, even as the broader consensus remains tempered.
Lear Corporation (NYSE:LEA) reported third‑quarter 2025 results with adjusted EPS of $2.79 on $5.7 billion in revenue, modestly above some expectations, while generating $444 million in operating cash flow and $307 million in free cash flow. The business also repurchased about $100 million of shares during the quarter under its ongoing repurchase program. LEA’s total liquidity stood near $3.0 billion at quarter’s end, supporting capital returns and operational flexibility.
Separately, Morgan Stanley downgraded LEA from Overweight to Equal‑Weight with a $112 target on December 8, reflecting caution around auto production cyclicality and demand variability.
Lear Corporation (NYSE:LEA) is a leading global automotive technology company that designs, engineers, manufactures, and supplies advanced seating and electrical systems to original equipment manufacturers (OEMs) worldwide.
8. Fifth Third Bancorp (NASDAQ:FITB)
PE Ratio: 14.27
Fifth Third Bancorp (NASDAQ:FITB) is one of the cheap stocks to buy on our list.
TheFly reported on December 22 that Truist Securities analyst Brian Foran maintained a Buy rating on FITB and raised the price target to $55 from $50, reflecting confidence in the bank’s earnings trajectory and capital return strategies. The increase aligns with broader constructive coverage, with consensus price targets for FITB clustering above recent trading levels.
Similarly, on December 17, 2025, Keefe, Bruyette & Woods (KBW) analyst David Konrad maintained a Market Perform rating and increased his price target to $53 from $50, citing Fifth Third Bancorp (NASDAQ:FITB)’s resilient business mix and disciplined expense management.
These analyst actions follow recent operational developments at FITB. The bank reduced its prime lending rate to 6.75% on December 10, a move that may support net interest income as funding costs adjust, following prior rate reductions earlier in the year.
Fifth Third Bancorp (NASDAQ:FITB) operates as a diversified financial services company. It provides a range of banking and financial services, including retail and commercial banking, consumer lending, and wealth management across the Midwest and Southeastern United States.
7. The PNC Financial Services Group, Inc. (NYSE:PNC)
PE Ratio: 13.75
The PNC Financial Services Group, Inc. (NYSE:PNC) is one of the cheap stocks to buy.
On December 18, TheFly reported that Morgan Stanley analyst Betsy Graseck raised PNC’s price target to $211 from $209, maintaining an Underweight rating. Around the same time, on December 17, PNC Multifamily Capital closed its 100th Low-Income Housing Tax Credit Fund, investing over $175 million to support nearly 1,500 affordable homes, highlighting the company’s commitment to community development and ESG-focused initiatives.
The same day, Truist Securities analyst John McDonald raised his price target to $229 from $210, maintaining a Hold rating. Truist cited stronger fee income, gradual credit cost increases, and increased share buybacks, supported by The PNC Financial Services Group, Inc. (NYSE:PNC)’s positive Q3 performance, improving credit metrics, and management commentary on operational trends, signaling confidence in the company’s long-term earnings potential.
The PNC Financial Services Group, Inc. (NYSE:PNC) is a leading diversified financial services institution in the United States, offering a wide range of banking, lending, investment, and asset management services to individuals, corporations, government entities, and nonprofit organizations.
6. Valley National Bancorp (NASDAQ:VLY)
PE Ratio: 13.73
Valley National Bancorp (NASDAQ:VLY) is one of the best cheap stocks to buy.
On December 16, TheFly reported that JPMorgan analyst Anthony Elian maintained an Overweight rating on VLY and raised the price target from $14.00 to $14.50. This adjustment reflects confidence in the bank’s solid fundamentals and steady earnings momentum. The modest increase in the price target suggests that VLY is expected to continue outperforming its regional peers over the next 12 months, without signaling a dramatic revaluation.
On December 15, 2025, UBS analyst Nicholas Holowko initiated coverage of Valley National Bancorp (NASDAQ: VLY) with a Buy rating and set a $15.00 price target for the stock. Holowko’s Buy rating reflects UBS’s positive outlook on the bank’s ability to expand its net interest margin over the next few years and to deliver above‑peer earnings growth, which the firm believes should support valuation expansion over the next 12 months
Valley National Bancorp (NASDAQ:VLY) is a regional bank holding company that provides a wide range of financial services through its principal subsidiary, Valley National Bank. The company operates across multiple U.S. states and serves individual consumers, small to medium-sized businesses, and commercial clients.
5. Ameriprise Financial, Inc. (NYSE:AMP)
PE Ratio: 13.64
Ameriprise Financial, Inc. (NYSE:AMP) is one of the cheap stocks to buy on our list.
TheFly reported on December 22 that Morgan Stanley analyst Michael Cyprys maintained an Underweight rating on AMP while slightly raising the price target to $485 from $484, reflecting a cautious outlook amid broader financial sector model updates as 2025 concludes.
In contrast, on December 10, BofA Securities raised its price target on Ameriprise Financial, Inc. (NYSE:AMP) to $653 from $592 while maintaining a Buy rating on the shares. Looking ahead to 2026, the firm now favors alternative asset managers over online brokers, citing better valuations, stronger positioning, and a more favorable macroeconomic backdrop, according to the analyst’s note covering the brokers, asset managers, and exchanges sector.
The divergence in analyst views is anchored in the company’s operational performance. On December 18, 2025, AMP was recognized as a top-tier growth prospect, supported by forecasted 12.6% year-over-year earnings growth. The firm also reported an adjusted operating EPS of $9.92 for Q3, exceeding consensus estimates of $9.76, highlighting both revenue strength and effective expense management.
Ameriprise Financial, Inc. (NYSE:AMP) is a diversified financial services firm based in Minneapolis, Minnesota, founded in 1894. It offers wealth and asset management, financial planning, insurance, and annuity services to individuals, institutions, and businesses worldwide.
4. Tenet Healthcare Corporation (NYSE:THC)
PE Ratio: 13.59
Tenet Healthcare Corporation (NYSE:THC) is among the other cheap stocks.
On December 18, TheFly reported that Morgan Stanley reiterated its Overweight rating on THC and maintained a $247 price target, citing confidence in the company’s operational execution and strong positioning within healthcare services. Earlier, on December 2, Guggenheim maintained its Buy rating and raised its price target to $257, reflecting similar optimism.
Tenet Healthcare Corporation (NYSE:THC)’s positive momentum is supported by its Q3 2025 results, which showed adjusted EBITDA of $1.099 billion, a year‑over‑year increase of more than 12%. Growth in ambulatory care earnings highlighted rising outpatient procedures and a shift toward higher-margin services. The company also raised its 2025 adjusted EBITDA guidance to $4.47 billion–$4.57 billion, signaling continued margin expansion and disciplined cost management.
Analysts view Tenet’s strong performance in ambulatory care and improving profitability as outweighing typical sector risks, such as reimbursement pressures and cyclicality in elective procedures.
Tenet Healthcare Corporation (NYSE:THC) is a diversified U.S. healthcare services company headquartered in Dallas, Texas. It operates an extensive network of acute care and specialty hospitals, ambulatory surgery centers, outpatient facilities, and physician practices across the United States.
3. Energy Transfer LP (NYSE:ET)
PE Ratio: 13.07
Energy Transfer LP (NYSE:ET) is one of the cheap stocks to buy on our list.
TheFly reported that on December 18, Morgan Stanley downgraded ET from Overweight to Equal Weight, maintaining a $19 price target. The firm cited a lack of catalysts to re-rate the shares higher, noting that without a clear event-driven path to close ET’s valuation discount relative to peers, outperformance versus the group is likely to remain challenging, according to the analyst’s research note.
On the same day, Energy Transfer LP (NYSE:ET) announced it is suspending the development of its Lake Charles LNG project. Management stated that continued development was “not warranted” at this time, as the company seeks to focus on projects with superior risk/return profiles. The suspension follows challenges in securing enough equity partners to unload a desired 50% interest in the facility.
Simultaneously, ET announced it will upsize the capacity of its planned Desert Southwest expansion project on the Transwestern Pipeline. To meet surging customer demand in Arizona and New Mexico, the company will increase the pipeline diameter from 42 inches to 48 inches. This modification will boost capacity to 2.3 billion cubic feet per day (Bcf/d) and is expected to increase 2026 growth capital expenditures by approximately $200 million, bringing the total project cost to $5.6 billion.
Energy Transfer LP (NYSE:ET) is a leading U.S. midstream energy company headquartered in Dallas, Texas. It operates over 140,000 miles of pipelines across 44 states, transporting and storing natural gas, crude oil, and natural gas liquids (NGLs).
2. Oshkosh Corporation (NYSE:OSK)
PE Ratio: 12.79
Oshkosh Corporation (NYSE:OSK) is among the best cheap stocks to buy.
TheFly reported on December 19 that Bernstein analyst Chad Dillard maintained a Market Perform recommendation on OSK and raised the price objective to $140 from $132. This adjustment comes as the firm balances the company’s strong performance in its Vocational and Transport segments against a more challenging operational environment in its Access equipment business.
Separately, on December 10, 2025, Argus Research lowered its price target for Oshkosh Corporation (NYSE:OSK) to $160 from $175 while maintaining a Buy rating. Analyst Kristina Ruggeri noted that despite the reduction, the target still suggests significant upside. On the same day, Morgan Stanley analyst Angel Castillo maintained an Equal-Weight rating and raised the price target to $147 from $136.
These actions are closely tied to OSK’s Q3 2025 operational results and updated fiscal guidance. The company reported adjusted earnings of $3.20 per share, exceeding analysts’ estimates of $3.12. However, the business revised its full-year 2025 adjusted EPS guidance downward to a range of $10.50–$11.00 from the prior $11.00 forecast, following a 1.9% decline in consolidated net sales to $2.69 billion. The revision primarily reflects an 18.6% drop in sales within the Access segment.
Oshkosh Corporation (NYSE:OSK) is a U.S. industrial manufacturer of purpose‑built vehicles and equipment used in defense, construction, industrial access, emergency response, and vocational markets worldwide.
1. Prosperity Bancshares, Inc. (NYSE:PB)
PE Ratio: 12.72
Prosperity Bancshares, Inc. (NYSE:PB) is one of the best cheap stocks to buy.
On December 19, 2025, Barclays analyst Jared Shaw maintained an Equal-Weight rating on PB and raised the price target from $82.00 to $83.00, reflecting updated valuation models for the banking sector. This move follows a period of relative consolidation for the stock.
Earlier, on December 15, 2025, Prosperity Bancshares, Inc. (NYSE:PB) reached its ex-dividend date for the fourth-quarter dividend of $0.60 per share, payable on January 2, 2026. This dividend represents a 3.45% increase from the prior quarter and continues the company’s long-standing record of regular dividend growth. The consistent return of capital highlights PB’s ability to generate steady cash flow and supports analysts’ Hold and Buy stances.
Prosperity Bancshares, Inc. (NYSE:PB) operates through its subsidiary, Prosperity Bank, providing a wide array of traditional loan and deposit products to consumers and small-to-medium-sized businesses. The bank is currently focused on integrating its pending acquisitions, including the merger with Southwest Bancshares, Inc., to further solidify its footprint in the San Antonio and Corpus Christi regions.
While we acknowledge the potential of PB to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PB and that has 100x upside potential, check out our report about this cheapest AI stock.
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