In this article, we will be taking a look at the 12 Most Undervalued Dow Stocks to Buy According to Analysts.
The Dow Jones Industrial Average is a benchmark index of the top 30 US firms. It has significant historical significance and symbolizes the resilience of the US economy.
It serves as a point of reference for both investors and analysts. However, not every stock in this select group of businesses performs the same. Some people prosper from economic growth and innovation, while others suffer from a variety of setbacks and market trends.
On Friday, September 26, 2025, the Dow Jones Industrial Average rose 0.6%, breaking a three-day losing streak as inflation data matched expectations and reinforced optimism about further rate cuts. The Fed’s preferred inflation measure, the core PCE index, increased 2.9% year-over-year and 0.2% month-over-month in August, remaining above the 2% target but easing fears of tighter policy. Futures markets now price in multiple rate cuts before year-end.
Intel led the Dow’s gains with strong earnings. Consumer staples such as Procter & Gamble and McDonald’s also advanced, reflecting demand for defensive, dividend-paying stocks. Pharmaceutical companies like Johnson & Johnson, Merck, and Amgen posted modest gains despite President Trump’s announcement of a 100% tariff on imported branded drugs unless firms build U.S. facilities. Investors largely interpreted the move as supportive of domestic production.
In contrast, major tech names including Apple, Microsoft, and NVIDIA declined, with NVIDIA sliding the most as investors reassessed high valuations in AI-related stocks. IBM bucked the broader tech weakness, rising on progress in quantum computing applications.
With this in mind, let’s take a look at the most undervalued Dow stocks to buy according to analysts.
Our Methodology
For our methodology, we screened the 30 Dow Jones stocks using the Stock Analysis screener. We applied two filters: a price-to-earnings (P/E) ratio below 25 and a positive analyst upside. This narrowed the list to 14 qualifying stocks. From these, we selected the top 12 with the highest analyst upside potential and ranked them in ascending order. Their respective P/E ratios are included in the subheadings for clarity.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Here is our list of the 12 most undervalued Dow stocks to buy according to analysts.
12. 3M Company (NYSE:MMM)
Price Target Upside: 1.68%
PE Ratio: 21.22
3M Company (NYSE:MMM), a diversified industrial giant known for its innovations in healthcare, safety, and industrial products, is being recognized by analysts as one of the most undervalued Dow stocks heading into 2025. The firm is executing a “back to basics” strategy aimed at restoring growth and operational discipline while navigating macroeconomic challenges and ongoing litigation. MMM stands twelfth on our list among the most undervalued stocks.
At the Morgan Stanley 13th Annual Laguna Conference in September 2025, CEO Bill Brown outlined MMM’s strategic vision, which includes a 25% margin expansion target by 2027 and the launch of 1,000 new products over the next three years. With a focus on research, development, and commercial excellence, the firm expects these initiatives to generate $1 billion in growth above macroeconomic trends. Key industries such as semiconductors, aerospace, data centers, and automotive are at the center of this growth strategy.
To sharpen its portfolio, 3M Company (NYSE:MMM) is reviewing more than 120 profit centers and plans to divest roughly 10% of underperforming businesses. Operational improvements are already visible, with on-time delivery surpassing 90% in Q3 2025, helping the business rebuild distributor and customer confidence.
However, legal challenges remain significant. The corporation is managing PFAS and earplug-related lawsuits, including a $12.5 billion PFAS settlement with public water suppliers. The firm issued its first payment, an $8 million check to New Hampshire, in September 2025. In line with regulatory and environmental goals, MMM will exit PFAS manufacturing by the end of 2025 and is developing alternatives to eliminate PFAS from consumer products.
Financially, 3M Company (NYSE:MMM) reported strong Q2 2025 results with earnings per share beating estimates and organic revenue rising 1.4% year-over-year. With a dividend yield of 1.9% and a payout ratio near 40%, the company continues to appeal to investors seeking both value and dividend growth.
11. The Travelers Companies, Inc. (NYSE:TRV)
Price Target Upside: 2.29%
PE Ratio: 12.25
The Travelers Companies, Inc. (NYSE:TRV), a leading U.S. property and casualty insurer, is showcasing resilience and growth as the insurance industry faces inflation, natural disasters, and rising risks. Known for disciplined underwriting, the company is combining strong financial performance with strategic innovation to strengthen its market position.
The company’s Q2 2025 results were robust. The combined ratio improved by 9.9 points to 90.3%, driven by lower catastrophe losses and favorable reserve adjustments. Net income surged 183% year-over-year to $1.51 billion, reflecting operational efficiency and effective risk management.
Technology is playing a central role in these results. TRV now uses AI to automate more than half of its claims processing, reducing administrative costs and accelerating service. Notably, 90% of catastrophe claims are settled within 30 days, boosting both efficiency and customer satisfaction. The business is also expanding in high-demand areas like cyber insurance and climate resilience, while its Workforce Advantage® program continues to reduce workplace injury costs through proactive safety and recovery efforts.
Beyond financial performance, The Travelers Companies, Inc. (NYSE:TRV) is taking steps to address broader industry challenges. Through its “Risk. Regulation. Resilience. Responsibility.” initiative, launched by the Travelers Institute, the business is working with policymakers, carriers, and consumers to tackle insurance affordability and availability issues and build more resilient communities.
10. The Boeing Company (NYSE:BA)
Price Target Upside: 5.22%
PE Ratio: –
The Boeing Company (NYSE:BA), a global leader in aerospace manufacturing, continues to strengthen its position in both commercial and defense aviation with recent regulatory and market wins.
On September 29, 2025, the Federal Aviation Administration (FAA) will relax restrictions on BA’s ability to issue airworthiness certificates for select 737 Max jets and the 787 Dreamliner. The new arrangement allows Boeing to alternate weekly certification duties with the FAA, expediting production and delivery timelines. This marks a turning point after years of heightened oversight following safety and quality concerns, signaling renewed regulatory confidence in the business’s processes.
Alongside this regulatory shift, The Boeing Company (NYSE:BA) secured several landmark orders. Turkish Airlines placed its largest-ever widebody order, committing to up to 75 Boeing 787 Dreamliners and 150 737 Max jets. The deal, which supports more than 123,000 U.S. jobs, is set to double the airline’s Boeing fleet and highlights strong global demand for BA aircraft.
Norwegian Group also returned as a direct BA customer, ordering 30 737-8 Max planes and expanding its 737 Max backlog to 80, underscoring the model’s appeal for fuel efficiency and sustainability goals, and reinforcing BA’s position among the most undervalued stocks.
Investor confidence has followed these developments, with The Boeing Company (NYSE:BA) shares climbing more than 30% year-to-date.
