In this article, we will look at the 10 Undervalued Counter Cyclical Stocks to Buy Now.
Counter-cyclical stocks are getting more attention as investors look for businesses tied to demand that does not disappear just because the economy slows. For this list, the focus is on consumer staples, healthcare, and gold stocks. These draw interest when investors want earnings streams linked to essential products, medical demand, or portfolio protection.
Fidelity describes consumer staples as a “defensive-oriented sector” made up of companies that sell “essential goods and services,” adding that demand for these goods “tends to remain stable, even during an economic downturn.” The firm also says, “Valuation dispersion across the sector has created investment opportunities among mispriced stocks.” Manulife Investment Management makes a similar point in healthcare, saying the sector has a “lower-volatility profile” and “defensive characteristics,” while current valuations create “an attractive entry point today.” It also points to companies serving patients in “disease states with inelastic demand.” VanEck adds the gold-stock angle, saying “gold stocks surged in 2025 but remain undervalued versus history and bullion,” while “attractive valuations and strong margins point to more upside in 2026.” In summary, the setup is about finding counter-cyclical companies where essential demand and discounted valuations overlap. Against this backdrop, undervalued counter-cyclical stocks deserve a closer look.
With that in mind, let’s take a look at the 10 Undervalued Counter Cyclical Stocks to Buy Now.
Our Methodology
We used the Finviz screener to identify consumer staples, healthcare, and gold stocks with forward P/E ratios below 25. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
10. Dollar General Corporation (NYSE:DG)
On June 4, 2026, Barclays lowered the firm’s price target on Dollar General Corporation (NYSE:DG) to $148 from $151 and maintained an Overweight rating on the shares. Barclays said the company reported a good quarter and estimates are moving higher, though the results “failed to excite the market.” The firm said Dollar General’s risk/reward remains attractive and that post-earnings concerns “could be wrong.”
On June 3, 2026, Bernstein raised the firm’s price target on Dollar General Corporation (NYSE:DG) to $149 from $146 and maintained an Outperform rating on the shares. The firm said the company’s Q1 beat was led by gross margin. Comparable sales growth of 2.0% was slightly below the sell-side consensus of 2.1%, but better than feared versus buy-side expectations. Bernstein also noted a 65bps year-over-year improvement in gross margin, driven by higher inventory markups and lower shrinkage and damages, partly offset by increased markdowns and fuel costs.
On June 2, 2026, Dollar General Corporation (NYSE:DG) reported Q1 EPS of $2.00, compared with consensus of $1.89, and revenue of $10.8B, compared with consensus of $10.81B. Q1 same-store sales increased 2%. CEO Todd Vasos said EPS exceeded the company’s expectations as operating margin expansion more than offset severe winter weather and higher fuel costs, while topline results were supported by positive customer traffic and balanced category growth.
Dollar General Corporation (NYSE:DG) is a discount retailer that provides merchandise products across the southern, southwestern, midwestern, and eastern United States.
9. Tyson Foods, Inc. (NYSE:TSN)
On June 8, 2026, Tyson Foods, Inc. (NYSE:TSN) announced the appointment of Wes Morris as COO. Morris will oversee the company’s business segments and brings more than 20 years of experience with Tyson Foods, including prior leadership roles as president of the prepared foods and poultry businesses. Morris will begin the role on June 15. Tyson Foods also said Devin Cole will be retiring from the company.
On June 1, 2026, Goldman Sachs analysts added Tyson Foods, Inc. (NYSE:TSN) to the firm’s US Conviction List as part of its monthly update. The firm said it expects above-consensus earnings growth at Tyson, supported by the company’s diversified protein portfolio and margin expansion. Goldman Sachs has a Buy rating on the shares with an $81 price target.
On May 28, 2026, Tyson Foods, Inc. (NYSE:TSN) backed its FY26 adjusted operating income view of $2.2B-$2.4B, capital expenditures view of $700M-$1B, free cash flow view of $1.2B-$1.8B, and adjusted tax rate view of 25%. The company said it remains focused on executing its strategy to drive long-term profitable growth and strong cash generation.
Tyson Foods, Inc. (NYSE:TSN) operates as a food company worldwide through its Beef, Pork, Chicken, and Prepared Foods segments.
8. McCormick & Company, Incorporated (NYSE:MKC)
On June 12, 2026, JPMorgan lowered the firm’s price target on McCormick & Company, Incorporated (NYSE:MKC) to $63 from $64 and maintained an Overweight rating on the shares as part of a Q2 earnings preview. JPMorgan said the company reiterating its annual guidance “seems well-telegraphed.”
Meanwhile, UBS analyst Peter Grom lowered the firm’s price target on McCormick & Company, Incorporated (NYSE:MKC) to $51 from $53 and maintained a Neutral rating on the shares. Grom said UBS updated its expectations across Food to reflect demand trends and inflation.
On May 29, 2026, Reuters reported that activist hedge fund Toms Capital Investment Management had built a significant stake in McCormick & Company, Incorporated (NYSE:MKC), citing sources familiar with the matter. Toms bought McCormick during Q2 after the company announced its planned acquisition of Unilever’s (UL) food business, according to the report. Reuters also said Toms “prefers to stay in the background and push for changes out of the limelight.” Shares of McCormick rose 75c to $47.58 following the report.
McCormick & Company, Incorporated (NYSE:MKC) manufactures, markets, and distributes herbs, spices, seasoning mixes, condiments, and other flavorful products for the food industry.
7. The J. M. Smucker Company (NYSE:SJM)
On June 11, 2026, UBS raised the firm’s price target on The J. M. Smucker Company (NYSE:SJM) to $130 from $121 and maintained a Buy rating on the shares.
BofA analyst Peter Galbo also raised the firm’s price target on The J. M. Smucker Company (NYSE:SJM) to $132 from $130 and maintained a Buy rating on the shares. Galbo said that despite significant macro disruption, Smucker provided an initial FY27 outlook with $10 in EPS at the midpoint. BofA raised its FY27 EPS forecast to $10 and expects the shares to continue outperforming center store food peers.
Similarly, BTIG raised the firm’s price target on The J. M. Smucker Company (NYSE:SJM) to $130 from $120 and maintained a Buy rating on the shares after the company’s Q4 earnings beat. BTIG said Smucker stands out among food companies because of cost deflation, fundamental EPS growth, ongoing deleveraging, and strong free cash flow.
On June 9, 2026, The J. M. Smucker Company (NYSE:SJM) reported fiscal Q4 adjusted EPS of $2.77, compared with consensus of $2.64, and revenue of $2.27B, compared with consensus of $2.26B. CEO Mark Smucker said the company delivered positive net sales and earnings growth in the quarter while navigating a dynamic external environment, adding that Smucker is entering fiscal 2027 with meaningful momentum.
The J. M. Smucker Company (NYSE:SJM) manufactures and markets branded food and beverage products worldwide.
6. Merck & Co., Inc. (NYSE:MRK)
On June 12, 2026, Merck & Co., Inc. (NYSE:MRK) announced that the U.S. Food and Drug Administration approved KEYTRUDA and KEYTRUDA QLEX, each in combination with WELIREG, for the adjuvant treatment of adult patients with renal cell carcinoma with a clear cell component at intermediate-high or high risk of recurrence following nephrectomy, or following nephrectomy and resection of metastatic lesions. Merck said the approvals represent the first approval for WELIREG in earlier-stage ccRCC and the first approvals for PD-1 and HIF-2 alpha inhibitor combination regimens.
The approvals were based on results from the Phase 3 LITESPARK-022 trial, which enrolled 1,841 patients. Merck said KEYTRUDA in combination with WELIREG significantly improved disease-free survival, reducing the risk of disease recurrence, metastasis, or death by 28% compared with KEYTRUDA plus placebo. The estimated 24-month disease-free survival rate was 81% with KEYTRUDA plus WELIREG, compared with 74% with KEYTRUDA plus placebo. Median disease-free survival was not reached in either arm, while overall survival results were not yet mature at the interim analysis.
On June 11, 2026, Merck Animal Health, a division of Merck & Co., Inc. (NYSE:MRK), signed a definitive agreement to acquire Targan, a privately held company developing biodevice solutions for the poultry industry, for an undisclosed purchase price. Merck Animal Health has invested in Targan since 2017 and has been one of its largest shareholders. The proposed acquisition is expected to close in Q3, subject to regulatory approvals and other customary closing conditions.
Merck & Co., Inc. (NYSE:MRK) operates as a healthcare company worldwide.
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