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.
9. Chevron Corporation (NYSE:CVX)
Price Target Upside: 6.09%
PE Ratio: 20.61
Chevron Corporation (NYSE:CVX) is advancing its growth and diversification strategy as it balances traditional energy production with investments in lower-carbon initiatives.
On September 10, 2025, the company submitted a bid to explore natural gas in four offshore blocks near Greece’s Peloponnese peninsula and Crete, in partnership with Hellenic Energy. The move expands CVX’s footprint in the Eastern Mediterranean, a region attracting interest for its promising natural gas reserves. The project also supports Greece’s push for energy independence and aligns with the corporation’s strategy to position natural gas as a transitional fuel in the global shift toward cleaner energy.
Chevron Corporation (NYSE:CVX)’s second-quarter results reflected record oil and gas output while highlighting progress in renewable fuels, lithium, hydrogen, and carbon capture projects. These efforts underscore the company’s aim to balance profitability with sustainability, mitigating long-term regulatory and market risks.
Financially, the firm maintains steady shareholder returns, with its recent quarterly dividend of $1.71 per share yielding 4.3%. While analysts currently rate the stock a “Moderate Buy,” they see moderate upside potential as the company navigates energy market volatility and integrates major acquisitions.
One key near-term factor is the ongoing integration of Hess Corporation, which weighed on Q3 earnings by an estimated $200–$400 million but is expected to deliver meaningful long-term growth. CEO Mike Wirth has also emphasized Chevron Corporation (NYSE:CVX)’s focus on international partnerships, including strengthening ties with Argentina in coordination with U.S. policy priorities.
8. Verizon Communications Inc. (NYSE:VZ)
Price Target Upside: 10.35%
PE Ratio: 10.13
Verizon Communications Inc. (NYSE:VZ), one of the U.S.’s largest telecommunications providers, is strengthening its market position with solid financial results, dividend growth, and new technology partnerships.
The company reported strong second-quarter performance in 2025, prompting an upward revision of its guidance for adjusted EBITDA, EPS, and free cash flow. Building on this momentum, VZ announced a 1.8% dividend increase to $0.69 per share, effective November 3, 2025. This marks the 19th straight year of dividend growth and results in a 6.3% yield, supported by a sustainable payout ratio of about 63%. With its consistent track record, Verizon is often highlighted among the most undervalued stocks in the telecom sector.
Verizon Communications Inc. (NYSE:VZ) is also leading efforts to shape the future of wireless technology. It co-launched the Industry 6G Alliance with partners including Ericsson, Samsung, Nokia, Meta, and Qualcomm to drive the next generation of connectivity. Meanwhile, its 5G Ultra Wideband network continues to expand into mission-critical applications. As part of its Verizon Frontline initiative, the firm recently deployed more than 950 5G-enabled smartphones to the Tampa Police Department to enhance emergency communications.
In September 2025, the business deepened its collaboration with Meta by becoming the first carrier to offer the new AI-powered Meta Ray-Ban Display glasses. The partnership reflects VZ’s push to integrate advanced wearable technology into its network ecosystem, offering customers new connectivity experiences.
Beyond technology, Verizon Communications Inc. (NYSE:VZ) underscored its long-term corporate presence with the relocation of its headquarters to PENN 2 in Midtown Manhattan, expected to be completed by 2026.
7. UnitedHealth Group Incorporated (NYSE:UNH)
Price Target Upside: 13.08%
PE Ratio: 14.94
UnitedHealth Group Incorporated (NYSE:UNH), a leading U.S. healthcare and insurance provider, serves over 51 million members through its UnitedHealthcare and Optum divisions, offering insurance, pharmacy, and data-driven health services.
In September 2025, UNH launched a direct-to-consumer digital platform designed to simplify plan selection and enhance convenience for members, highlighting the company’s focus on technology-driven customer solutions.
Financially, UnitedHealth Group Incorporated (NYSE:UNH) reported Q2 2025 revenues of nearly $112 billion, a 13% year-over-year increase, with Optum contributing $67.2 billion, up 6.8%. Truist Securities reaffirmed its “Buy” rating on the stock and raised the price target to $365, citing preliminary data indicating that 78% of members are expected to be enrolled in plans rated four stars or higher for 2027. The corporation reaffirmed its 2025 EPS guidance of at least $16, though integration of its Amedisys acquisition may create short-term earnings pressure.
Despite strong performance, UNH faces regulatory and legal challenges, including a criminal investigation into Medicare billing practices. CEO Stephen Hemsley, who resumed leadership in May 2025, is actively engaging with government officials to address policy issues affecting Medicare Advantage plans. Insider stock purchases by directors and Hemsley signal confidence in the company’s recovery prospects.
Investor interest remains robust. UnitedHealth Group Incorporated (NYSE:UNH) ranked highest among the most popular hedge fund holdings in Q2 2025, and Warren Buffett’s Berkshire Hathaway disclosed a $1.57 billion investment, reinforcing confidence in the company’s long-term value.
6. The Walt Disney Company (NYSE:DIS)
Price Target Upside: 15.27%
PE Ratio: 17.77
The Walt Disney Company (NYSE:DIS), a global entertainment leader, continues to expand its content and strategic initiatives to drive growth and engagement. In September 2025, Disney+ premiered high-profile releases, including the new “Lilo & Stitch” movie, the series “Marvel Zombies,” and several specials across Disney+ and Hulu, reinforcing Disney’s leadership in streaming and supporting subscriber growth.
DIS has also leveraged its brand in fashion through the Harry Lambert for Zara x Disney collection, with pop-ups in England, Japan, and China, showcasing iconic characters and diversifying revenue streams.
Under CEO Bob Iger and CFO Hugh Johnston, The Walt Disney Company (NYSE:DIS) is pursuing a growth-focused strategy aimed at boosting profitability. The company raised full-year guidance, targeting double-digit EPS growth, fueled by initiatives such as a standalone ESPN app, Disney Cruise Line expansions, and consolidation of Hulu content into Disney+. International market expansion remains a key focus to drive long-term growth, positioning DIS among the most undervalued stocks in the media and entertainment sector.
The Walt Disney Company (NYSE:DIS) also navigated brand and public relations considerations, temporarily suspending ABC’s “Jimmy Kimmel Live!” due to content timing concerns, before resuming the show, reflecting the company’s cautious approach to maintaining its reputation.
5. The Procter & Gamble Company (NYSE:PG)
Price Target Upside: 16.13%
PE Ratio: 23.36
The Procter & Gamble Company (NYSE:PG) is advancing a major restructuring and portfolio simplification plan to drive growth amid slowing sales and economic pressures. In September 2025, PG announced it would cut 7,000 jobs, about 6.4% of its global workforce, by mid-2027, primarily in non-manufacturing roles. The move aims to improve productivity, reallocate resources toward innovation, and respond to activist investor demands for cost efficiency and focus on core brands.
The Procter & Gamble Company (NYSE:PG) is also streamlining product lines, particularly in international markets, by reducing variety in certain categories and divesting slower-growing brands. While core markets like the U.S., China, Japan, Canada, and Western Europe show modest organic sales growth, underperforming “enterprise markets” are driving the company’s focus on trimming less profitable segments. Despite these challenges, the corporation continues to support a broad portfolio of trusted brands, including Tide, Pampers, Olay, Gillette, Crest, and Head & Shoulders.
Financially, The Procter & Gamble Company (NYSE:PG) is viewed as undervalued by analysts, with a 12-month price target near $176, suggesting a potential 16% upside from current levels. Analysts project modest earnings growth for fiscal 2026, with EPS expected at $6.99, while revenue remains stable. The business’s reputation for steady dividends and defensive characteristics enhances its appeal in uncertain markets.
4. The Coca-Cola Company (NYSE:KO)
Price Target Upside: 17.54%
PE Ratio: 23.25
The Coca-Cola Company (NYSE:KO), a global beverage leader known for its iconic soda, juices, coffees, teas, and alcoholic drinks, continues to demonstrate resilience and strategic growth. Operating through a franchise model with local bottlers, the company maintains a strong global footprint while adapting to evolving consumer habits.
In September 2025, KO emphasized its commitment to digital transformation at the Barclays 18th Annual Global Consumer Staples Conference. By leveraging artificial intelligence, data analytics, and technology, The Coca-Cola Company (NYSE:KO) aims to enhance customer engagement, improve operational efficiency, and expand market share, particularly in emerging markets, where it targets a 0.5 percentage point growth. These initiatives highlight a long-term strategy focused on innovation and capital investments.
Coca-Cola Europacific Partners also continued its €1 billion share buyback program, repurchasing over 40,000 shares in late September, reflecting confidence in the company’s valuation and prospects. Meanwhile, the company is adjusting to the rebound in “away-from-home” consumption at restaurants, entertainment venues, and travel hubs, offering both refillable, value-oriented options and premium single-serve products to capture a broad range of consumer preferences.
The Coca-Cola Company (NYSE:KO) is also investing in sustainable infrastructure, including the closure of its 30-year-old Ho Chi Minh City factory in Vietnam and the simultaneous construction of a new $136 million, LEED Gold-certified plant in Tay Ninh Province. This facility, the largest in the country, underscores the firm’s confidence in the region’s growth potential and its commitment to environmentally responsible production.
3. Amgen Inc. (NASDAQ:AMGN)
Price Target Upside: 20.08%
PE Ratio: 22.26
Amgen Inc. (NASDAQ:AMGN), a leading biotechnology company specializing in innovative therapeutics for complex cancers and serious illnesses, is strengthening its U.S. manufacturing footprint with a major $650 million expansion announced in September 2025. The project will upgrade the biologics facility in Juncos, Puerto Rico, incorporating advanced technologies to enhance production efficiency and operational resilience. The expansion is expected to create nearly 750 new jobs, spanning construction and skilled manufacturing roles, while aligning with President Trump’s recent 100% tariffs on imported pharmaceuticals. AMGN’s domestic investment shields it from these tariffs and bolsters supply chain security.
This initiative follows earlier investments of $900 million in Ohio and $1 billion in North Carolina, reflecting Amgen Inc. (NASDAQ:AMGN)’s continued focus on scaling production to support its growing product pipeline. These strategic moves position the company to meet rising demand while maintaining operational flexibility across key U.S. sites.
Financially, the firm reported strong Q2 2025 results, with revenues rising 9% year-over-year to $9.2 billion and GAAP earnings per share surging 92%. Despite a modest recent pullback in stock price amid broader market trends, analysts maintain a positive outlook, with some viewing Amgen Inc. (NASDAQ:AMGN) as one of the most undervalued stocks in the biotech sector.
2. Honeywell International Inc. (NASDAQ:HON)
Price Target Upside: 20.36%
PE Ratio: 23.68
Honeywell International Inc. (NASDAQ:HON), a diversified global technology and manufacturing leader, continues to strengthen its position across aerospace, industrial automation, energy solutions, and emerging technologies such as quantum computing. The company is recognized for its strong dividends, robust aerospace segment, and strategic portfolio optimization.
In September 2025, HON raised $600 million in equity for its quantum computing subsidiary, Quantinuum, at a $10 billion valuation. The funding will accelerate the launch of Quantinuum’s next-generation Helios system and advance progress toward fault-tolerant universal quantum computing, with major investors including NVIDIA, Quanta Computer, and QED Investors.
The firm is also moving forward with its planned spin-off of the Solstice Advanced Materials division, supported by senior notes issued in early September, as part of broader restructuring. Aerospace is targeted for a spin-off in the second half of 2026, reflecting HON’s focus on unlocking value and emphasizing innovation-led sectors.
Financially, Honeywell International Inc. (NASDAQ:HON) reported Q2 2025 earnings of $2.75 per share on $10.35 billion revenue, beating estimates, and updated its full-year EPS guidance to $10.45–$10.65. The aerospace business shows momentum driven by strong defense demand and strategic supply chain investments. Recent technology acquisitions, including Li-ion Tamer and SparkMeter platforms, strengthen Honeywell’s Building Automation and Smart Energy offerings, while the new HON1600 small-thrust-class aircraft engine targets uncrewed military operations with additive manufacturing for faster production and improved supply resilience.
1. Merck & Co., Inc. (NYSE:MRK)
Price Target Upside: 36.82%
PE Ratio: 12.10
Merck & Co., Inc. (NYSE:MRK) tops our list for being one of the most undervalued stocks. It is a global healthcare leader in pharmaceuticals, vaccines, biologics, and animal health products.
A major recent development is the FDA approval of KEYTRUDA QLEX, a new subcutaneous injectable formulation of the company’s blockbuster cancer therapy Keytruda, on September 19, 2025. This injection can be administered in one to two minutes, compared with the traditional 30-minute intravenous infusion, enhancing patient convenience and clinical efficiency. The U.S. rollout is expected by late September, with projections suggesting it could capture 30-40% of Keytruda users within two years, helping MRK maintain market leadership amid biosimilar competition.
In Europe, Merck & Co., Inc. (NYSE:MRK) received a positive opinion from the European Medicines Agency for ENFLONSIA (clesrovimab), an RSV preventive for infants during their first RSV season. If approved, it will be the first weight-independent RSV preventive option for European infants, addressing a significant unmet need.
Financially, Merck & Co., Inc. (NYSE:MRK) reported strong Q2 2025 results. Analysts continue to highlight its robust vaccine franchise, animal health segment, and innovative oncology treatments, including combination therapies with Keytruda. The corporation is also advancing novel drug candidates, such as raludotatug deruxtecan, which recently received FDA Breakthrough Therapy Designation for platinum-resistant ovarian and related cancers, accelerating development for patients with high unmet medical needs.
While we acknowledge the potential of MRK 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 MRK and that has 100x upside potential, check out our report about this cheapest AI stock.
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