In this article, we will be taking a look at the 5 Most Undervalued Dow Stocks to Buy Now. If you wish to see the full list, visit 10 Most Undervalued Dow Stocks to Buy Now.
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 (NYSE:IBM) 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 (NYSE:IBM) 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. (NYSE:MRK) 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. (NYSE:MRK) 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. (NYSE:MRK) 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 (NYSE:PG) 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 (NYSE:PG) 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 (NYSE:PG) 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 (NYSE:DIS) 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 (NYSE:DIS) 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. (NYSE:CRM) 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. (NYSE:CRM) 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.
While we acknowledge the risk and potential of CRM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CRM and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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