In this article, we will be taking a look at the 10 Most Undervalued Dow Stocks to Buy Now.
The Dow Jones Industrial Average was established on May 26, 1896, as a straightforward benchmark to monitor market performance by author Charles Dow, who is a co-founder of Dow Jones & Co. and The Wall Street Journal. Compared to the 30 companies it currently represents, the index started with just 12 companies, which is a far smaller and more industrial-focused portfolio.
It had a very turbulent early history. In August 1896, just a few months after its creation, the index had already fallen by more than thirty percent. This came about as a result of the political unrest and market turbulence surrounding William McKinley and William Jennings Bryan’s 1896 U.S. presidential contest, especially the disputes over the gold standard.
The Great Depression was the Dow’s worst long-term test. It fell more than 90% from its peak in 1929 to 41.22% in July 1932, which means it almost erased more than thirty years of gains. The index recovered slowly, and it wasn’t until the mid-1950s that it surpassed its pre-crash peak.
A similar tendency was also discovered during the 2008 financial crisis. From its top of 14,165.53 on October 9, 2007, the Dow dropped more than 54% to an intraday low of 6,547.05. Only on March 5, 2013, 1,004 trading days after the 2009 low, did the index close at its prior high of 14,253.77.
The mood of the market has considerably improved in recent times. Gains in banking and energy stocks helped the Dow hit a new all-time high on January 5, rising 1.23% to 48,977.18. The index increased 12.97% in 2025, closing December up 0.7%. This was the indicator’s eighth consecutive monthly gain since 2018.
Even though there were occasional crises, the Dow has continuously produced long-term returns. It climbed by 12.1% on average between June 2015 and June 2025, while the S&P 500 and Nasdaq Composite increased by 13.6% and 15.2%, respectively. The Dow has traditionally shown incredible durability during downturns while still contributing to long term market growth, even in challenging years like 2022, when it fell 8.9% compared to -19% for the S&P 500 and -33% for the Nasdaq.
With that said, let’s now take a look at the most undervalued stocks.
Our Methodology
For our methodology, we screened for Dow stocks with a P/E below 21 and positive upside. From this filtered list, we limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Here is our list of the 10 most undervalued Dow stocks to buy now.
10. Amgen Inc. (NASDAQ:AMGN)
Amgen Inc. (NASDAQ:AMGN) is one of the most undervalued stocks on this list.
TheFly reported on April 9 that Guggenheim increased its price target on AMGN from $347 to $351 while maintaining a Neutral rating on the stock. The firm noted that it is updating its financial model ahead of the company’s first-quarter results, which are expected after market close on April 30.
In a separate movement, on April 6, Amgen Inc. announced positive topline Phase 3 results for TEPEZZA delivered through a subcutaneous on-body injector in patients with moderate-to-severe active thyroid eye disease. The study achieved its primary endpoint, showing a 77% proptosis response rate compared with 19.6% for placebo over 24 weeks, with a mean eye bulge reduction of -3.17 mm versus -0.80 mm.
The trial also met multiple secondary endpoints, including improvements in diplopia outcomes, disease activity scores, quality-of-life measures, and overall responder rates, with statistically significant benefits across most measures. Safety findings were consistent with the known intravenous formulation profile, with mainly mild-to-moderate injection site reactions and no treatment discontinuations. The subcutaneous delivery system demonstrated comparable efficacy to the established IV formulation, offering a more convenient administration option while maintaining strong clinical performance in a condition that can significantly impair vision and daily functioning.
Amgen Inc. is a leading global biotechnology company focused on developing innovative human therapeutics. It specializes in treatments for oncology, cardiovascular disease, inflammation, bone health, and rare diseases, using advanced biologics and genetic science to address serious illnesses worldwide.
9. The Goldman Sachs Group, Inc. (NYSE:GS)
The Goldman Sachs Group, Inc. (NYSE:GS) is among the most undervalued Dow stocks on this list.
TheFly reported on April 14 that BofA Securities reduced its price target on GS from $1,100 to $1,050 while maintaining a Buy rating. The firm described first-quarter results as strong but noted that elevated market expectations weighed on investor reaction. It also pointed to several aspects of the quarterly update that may cause investors to pause before increasing exposure, as attention shifts to upcoming results from peer banks. Following the earnings release, the firm adjusted its earnings estimates for the next several quarters and fiscal 2027 downward by 2% to 3%, citing slower anticipated revenue growth.
Additionally, on April 13, The Goldman Sachs Group, Inc. CEO David Solomon told analysts that the firm is closely monitoring Anthropic’s Mythos AI model and is working with the company to strengthen cybersecurity defenses. He emphasized awareness of rapidly advancing large language models and their increasing technical capabilities, particularly in identifying and exploiting software vulnerabilities.
GS noted it has access to the Claude system and is collaborating with Anthropic and security partners to integrate frontier AI capabilities while enhancing cyber and infrastructure resilience. The discussion followed heightened attention from U.S. regulators and industry groups regarding potential cybersecurity risks posed by advanced AI systems.
The Goldman Sachs Group, Inc. is a global investment banking, securities, and asset management firm founded in 1869 and based in New York City. It serves corporations, governments, and individuals through banking, markets, wealth management, and platform solutions.
8. JPMorgan Chase & C0. (NYSE:JPM)
JPMorgan Chase & C0. is among the most undervalued Dow stocks.
TheFly reported on April 20 that Evercore ISI increased its price target on JPM from $320 to $340 while maintaining an Outperform rating. The firm attributed the revision to a standout quarter, highlighting exceptionally strong performance driven primarily by trading activity.
Separately, in a recent development, on April 7, JPMorgan Chase & C0. announced new philanthropic funding in Ohio aimed at strengthening workforce development across Columbus, Cleveland, and Cincinnati. The initiative includes more than $4 million in support for 12 organizations focused on career training, education pathways, and job placement programs designed to improve economic mobility.
Funding will target high-demand sectors such as healthcare, information technology, manufacturing, and construction, where skill shortages and labor demand are increasing. The programs are intended to expand access to credentialing, hands-on learning, coaching services, and employment matching systems to better connect job seekers with employers. The effort builds on the firm’s ongoing investments in regional workforce initiatives and collaboration between business, education, and community partners. Officials emphasized that the goal is to create a stronger, more adaptable talent pipeline that aligns with evolving labor market needs and supports long-term regional economic growth.
JPMorgan Chase & C0. is a global financial services firm headquartered in New York, operating in over 100 markets. It provides investment banking, commercial banking, asset management, and consumer banking services to corporations, governments, and individuals. It was formed through the merger of J.P. Morgan & Co. and Chase Manhattan Bank.
7. American Express Company (NYSE:AXP)
American Express Company (NYSE:AXP) is among the most undervalued stocks.
TheFlyy reported on April 9 that JPMorgan reduced its price target on AXP from $375 to $325 while maintaining a Neutral rating. The revision was part of broader adjustments across the consumer finance sector ahead of first-quarter earnings. The firm noted that the macroeconomic backdrop remains uncertain and highly volatile, leading to a more cautious stance across the group. It also emphasized that selectivity is increasingly important in the current environment, as investors assess exposure to consumer-linked financial stocks.
Moreover, recently, on April 16, American Express Company announced a definitive agreement to acquire Hypercard, an AI-focused expense management company. The deal is intended to enhance Amex’s commercial services capabilities by integrating Hypercard’s agentic AI tools, which automate expense tracking, categorization, policy checks, and submission reminders.
Hypercard, founded in 2022, has been developing autonomous workflows aimed at replacing manual expense processes with AI-driven systems. The companies previously collaborated in 2024 on a co-branded product featuring embedded AI expense agents. The acquisition is expected to close in the second quarter of 2026, subject to standard closing conditions.
American Express Company is a global financial services company founded in 1850, best known for its premium credit and charge cards and payment network. It serves consumers and businesses with travel and financial services, offering rewards and benefits such as lounge access and travel protection.
6. UnitedHealth Group Incorporated (NYSE:UNH)
UnitedHealth Group Incorporated (NYSE:UNH) is among the most undervalued stocks.
TheFly reported on April 7 that HSBC upgraded UnitedHealth Group Incorporated from Reduce to Hold and set a price target of $300.
More recently, on April 20, UNH announced a nationwide expansion of its rural health care programs aimed at improving access, reducing costs, and streamlining care delivery for providers and patients in underserved communities. The initiative focuses on strengthening rural health systems by improving payment speed, reducing administrative burdens, and expanding local care access. Key measures include accelerating reimbursement timelines by up to 50% for about 1,500 rural hospitals and all Critical Access Hospitals, as well as removing most prior authorization requirements for rural providers across multiple insurance lines.
The program also introduces new hub-and-spoke care models designed to bring essential medical services closer to patients within their communities. Company leadership emphasized the importance of rural health providers, noting their critical role in local care delivery and their financial vulnerability. The expansion reflects ongoing efforts to support long-term sustainability in rural health systems while improving efficiency and patient outcomes across geographically isolated regions in the United States.
UnitedHealth Group Incorporated is a Minnesota-based global healthcare company and the world’s largest by revenue. It operates through UnitedHealthcare (insurance) and Optum (health services and technology), serving about 149 million people worldwide.
5. International Business Machines Corporation (NYSE:IBM)
International Business Machines Corporation (NYSE:IBM) is among the most undervalued Dow stocks on this list.
TheFly reported on April 20 that Jefferies reduced its price target on IBM from $370 to $320 while maintaining a Buy rating. The firm highlighted expectations for a strong first-quarter performance, anticipating that IBM could exceed Street estimates driven by approximately 11% year-over-year software growth supported by easier comparison metrics.
Separately, earlier on April 10, the U.S. Department of Justice announced a False Claims Act settlement with International Business Machines Corporation totaling $17,077,043, including civil penalties. The resolution addresses allegations that the company did not meet anti-discrimination obligations tied to its federal contracts. Authorities stated the case involved practices that were alleged to have resulted in discrimination against employees and job applicants based on race, color, national origin, or sex.
The settlement marks the first resolution under a Civil Rights Fraud Initiative launched in May 2025. Officials emphasized that compliance with equal employment requirements remains a condition for companies holding federal contracts. IBM did not admit liability as part of the agreement, and the payment resolves the government’s claims under the False Claims Act related to workplace and hiring practices under federal contracting rules.
International Business Machines Corporation is a global technology company founded in 1911 and based in New York. It specializes in hybrid cloud, AI, consulting, and quantum computing, serving clients across industries like finance, healthcare, and telecom.
4. Merck & Co., Inc. (NYSE:MRK)
Merck & Co., Inc. is among the most undervalued stocks.
On April 20, MRK announced that the U.S. Food and Drug Administration granted Priority Review to two supplemental Biologics License Applications for KEYTRUDA and KEYTRUDA QLEX, each used in combination with Padcev for patients with muscle-invasive bladder cancer who are eligible for cisplatin-based chemotherapy.
The FDA assigned a target action date of August 17, 2026. The applications are supported by Phase 3 KEYNOTE-B15 data evaluating perioperative treatment with surgery compared to standard chemotherapy. Results from the program showed improved outcomes, including survival benefits, across multiple bladder cancer studies. The combination is already approved in several regions for advanced urothelial cancer and is being further studied across earlier and later stages of bladder disease.
Separately, it was reported on April 7 that on March 25, Merck & Co., Inc. announced the initiation of a cash tender offer, through a subsidiary, to acquire all outstanding shares of Terns Pharmaceuticals at $53.00 per share in cash. The offer follows a previously disclosed definitive agreement between the companies. If completed, Terns would become a wholly owned subsidiary of Merck.
The transaction requires more than 50% of shares to be tendered, regulatory clearance under antitrust rules, and other customary closing conditions. The offer is set to expire on May 4, 2026, unless extended. Merck has filed formal tender documentation with the SEC, and Terns’ board has recommended that shareholders accept the offer and tender their shares. The deal is expected to close in the second quarter of 2026.
Merck & Co., Inc. is a global pharmaceutical company founded in 1891 and based in Rahway, New Jersey. It develops medicines, vaccines, and biologic therapies, and is a leader in oncology and infectious disease treatments.
3. The Procter & Gamble Company (NYSE:PG)
The Procter & Gamble Company is also one of the most undervalued Dow stocks on this list.
TheFly reported on April 10 that BofA Securities reduced its price target on PG from $171 to $167 while maintaining a Buy rating. The firm kept its third-quarter earnings-per-share estimate at $1.55 but lowered its fiscal 2026 and 2027 projections, citing higher expected resin costs.
In a significant move, on April 14, The Procter & Gamble Company announced that its Board of Directors approved an increased quarterly dividend of $1.0885 per share on common stock as well as on its Series A and Series B ESOP Convertible Class A Preferred Stock. The new payout reflects a 3% rise compared to the previous quarter. The dividend will be paid on or after May 15, 2026, to shareholders of record as of April 24, 2026.
The increase applies to both common and eligible preferred shareholders. This adjustment continues the company’s long-standing practice of regular dividend growth. The decision underscores P&G’s ongoing commitment to returning capital to shareholders through consistent income distribution while maintaining its established dividend policy across all share classes.
The Procter & Gamble Company is a global consumer goods company founded in 1837 and based in Cincinnati, Ohio. It produces widely used household and personal care brands such as Tide, Pampers, Gillette, and Crest, operating in about 70 countries.
2. The Walt Disney Company (NYSE:DIS)
The Walt Disney Company (NYSE:DIS) is among the most undervalued stocks on this list.
TheFly reported on April 8 that Barclays revised its outlook on DIS, reducing its price target to $130 from $140 while maintaining an Overweight rating on the stock. The adjustment was made during a broader review of media sector estimates ahead of first-quarter earnings expectations. The firm highlighted that the industry continues to face both company-specific and broader cyclical pressures, which may encourage investors to remain cautious and favor higher-quality names even when valuations appear attractive. This update reflects a reassessment of near-term earnings visibility across the sector and a more conservative stance on growth expectations in the current market environment.
In another recent movement, on April 16, The Walt Disney Company has reportedly communicated to advertisers that it expects pricing of around $10 million for a 30-second commercial during its upcoming Super Bowl broadcast in 2027, according to industry sources cited in reporting. The game will mark Disney’s return as a Super Bowl broadcaster after a long gap of about two decades.
However, the proposed pricing has been met with hesitation from some marketers, who view the figure as high compared with recent market dynamics. Reports indicate that competing broadcasters have typically secured a large portion of Super Bowl advertising inventory well before the formal upfront selling season, while Disney’s current sales progress appears more limited at this stage.
The Walt Disney Company is a global entertainment company founded in 1923 and based in Burbank, California. It operates through Disney Entertainment, ESPN, and Disney Experiences, with major brands including Disney, Pixar, Marvel, and Star Wars.
1. Salesforce, Inc. (NYSE:CRM)
Salesforce, Inc. (NYSE:CRM) tops our list of most undervalued stocks.
TheFly reported on April 17 that Piper Sandler revised its outlook on CRM, reducing its price target from $250 to $215 while maintaining an Overweight rating. The firm cited a difficult environment for enterprise software in 2026, noting that advanced AI model developers are increasingly expanding into higher layers of business software and competing more directly for corporate IT spending. It also pointed to growing pressure on valuation assumptions as investors rethink long-term earnings multiples. Ahead of the upcoming first-quarter results, the firm adjusted group-level multiples and also downgraded three companies within the sector.
Separately, on April 15, Salesforce, Inc. announced an expanded partnership with Engine, a global travel connectivity platform. As part of the agreement, Engine will use CRM’s Agentforce 360 Platform to support its goal of improving connectivity and efficiency in the travel sector. The collaboration also integrates Slack alongside Agentforce to create a unified digital workspace. This setup is designed to allow employees and AI agents to operate together in real time, improving coordination across travel-related processes. Engine stated that the combined system will function as a central command hub to streamline and enhance each stage of the travel experience for users and operators.
Salesforce, Inc. is a global leader in cloud-based CRM software, founded in 1999 and based in San Francisco. It provides tools for sales, service, marketing, and analytics, and focuses on AI-driven customer solutions through its Einstein and Agentforce platforms.
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