5 Most Undervalued Large-Cap Stocks To Buy According To Analysts

In this article, we will be taking a look at the 5 most undervalued large-cap stocks to buy according to analysts. To read our detailed analysis of current stock market dynamics, you can go directly to see the 16 Most Undervalued Large-Cap Stocks To Buy According To Analysts.

5. Novartis AG (NYSE:NVS)

Number of Hedge Fund Holders: 28

Average Analyst Price Target: $111.5

Market Capitalization: $209.1 billion

Upside Potential: 16.7%

Novartis AG (NYSE:NVS) is a pharmaceutical company based in Switzerland. It develops healthcare products and offers prescription medicines, among more.

BMO Capital analysts initiated coverage on Novartis AG (NYSE:NVS) with a Market Perform rating and a $114 price target on February 23.

We saw 28 hedge funds long Novartis AG (NYSE:NVS) in the fourth quarter, with a total stake value of $874.9 million.

4. Comcast Corporation (NASDAQ:CMCSA)

Number of Hedge Fund Holders: 63

Average Analyst Price Target: $51.9

Market Capitalization: $169.7 billion

Upside Potential: 21.4%

In total, 63 hedge funds were long Comcast Corporation (NASDAQ:CMCSA) in the fourth quarter, with a total stake value of $4.3 billion.

Comcast Corporation (NASDAQ:CMCSA) is a cable and satellite company based in Philadelphia, Pennsylvania. The company provides residential broadband and wireless connectivity services.

On January 30, Citigroup analysts maintained a Buy rating and a $53 price target on Comcast Corporation (NASDAQ:CMCSA).

3. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 69

Average Analyst Price Target: $121.6

Market Capitalization: $150.1 billion

Upside Potential: 22.6%

An Outperform rating and a $115 price target were maintained on NIKE, Inc. (NYSE:NKE) on March 19 by analysts at Wedbush.

NIKE, Inc. (NYSE:NKE) is a footwear company based in Beaverton, Oregon. It designs and sells athletic footwear, apparel, equipment, and accessories.

There were 69 hedge funds long NIKE, Inc. (NYSE:NKE) in the fourth quarter, with a total stake value of $3.5 billion.

Bronte Capital mentioned NIKE, Inc. (NYSE:NKE) in its fourth-quarter 2023 investor letter:

“NIKE, Inc. (NYSE:NKE) of change of strategy: Fast forward a few years and Nike has had a change of strategy that was an Exocet to shoe industry retailers. Nike (who do not sell on Amazon) decided (accurately) that they had the hot product and wanted to drive sales through their own (mostly online) channels. They wanted to capture the retail margin.

Nike used to have 30,000 wholesale arrangements (retailers who sold their product). They cut this number sharply, down to 3000 and told people they were going to 1800. Small shoe retailers lost their core brand. Many failed…” (Click here to read the full text)

2. Pinduoduo Inc. (NASDAQ:PDD)

Number of Hedge Fund Holders: 71

Average Analyst Price Target: $181.4

Market Capitalization: $174.7 billion

Upside Potential: 39.8%

Based in Ireland, Pinduoduo Inc. (NASDAQ:PDD) is a broad-line retail company. It operates an e-commerce platform under the Pinduoduo name that offers products such as agricultural produce, apparel, shoes, bags, and more.

Pinduoduo Inc. (NASDAQ:PDD) was spotted in the portfolios of 71 hedge funds in the fourth quarter, with a total stake value of $83.3 billion.

On March 21, Citigroup analysts maintained a $185 price target and Buy rating on Pinduoduo Inc. (NASDAQ:PDD).

Baron Funds said this about Pinduoduo Inc. (NASDAQ:PDD) in its fourth-quarter 2023 investor letter:

“We added to our digitization theme by building a position in PDD Holdings Inc. (NASDAQ:PDD), a leading Chinese e-commerce platform. Founded in 2015, the company has emerged as China’s second largest e-commerce player, capturing approximately 20% market share. In our view, PDD’s competitive moat lies in its team purchase model that facilitates bulk buying through direct partnerships with manufacturers, thereby eliminating intermediaries (e.g., distributors and middlemen) and lowering costs. Key factors driving the company’s meteoric growth include rising consumer demand for affordable products in China amid an economic slowdown, small-scale merchants seeking alternatives to Alibaba, and superior management execution. PDD’s revenue growth outpaces gross merchandize value growth owing to rising take rates as merchants aggressively compete for consumer traffic on the platform. In our view, PDD should continue to gain market share given its dominance in the value-for-money segment, growing affordable branded product offerings, and high operational efficiency. We believe the company’s growth will be further supported by the recent launch of its international e-commerce platform, Temu, which has become one of the fastest growing apps globally. Leveraging China’s excess manufacturing capacity, Temu has strong negotiating power with domestic suppliers and attracts global consumers with competitively priced products. Temu’s recent initiatives to improve unit economics, coupled with achieving variable breakeven in the sizable U.S. market, showcase management’s skill and commitment to sustained growth. We expect PDD to at least double its earnings and free cash flow in the next three years, with the potential for continued compounding thereafter.”

1. Alibaba Group Holding Limited (NYSE:BABA)

Number of Hedge Fund Holders: 116

Average Analyst Price Target: $105.7

Market Capitalization: $187.4 billion

Upside Potential: 43.9%

A total of 116 hedge funds were long Alibaba Group Holding Limited (NYSE:BABA) in the fourth quarter, with a total stake value of $3.6 billion.

A $105 price target and Overweight rating were maintained on Alibaba Group Holding Limited (NYSE:BABA) on February 8 by JPMorgan analysts.

Alibaba Group Holding Limited (NYSE:BABA) is another broad-line retail company on our list. It provides technology infrastructure and marketing reach to merchants, brands, retailers, and other businesses.

Baron Funds said the following about Alibaba Group Holding Limited (NYSE:BABA) in its fourth-quarter 2023 investor letter:

“Alibaba Group Holding Limited (NYSE:BABA) is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall and owns 33% of Ant Group, which operates Alipay, China’s largest third-party online payment provider. Shares of Alibaba were down in the fourth quarter due largely to the delay of the previously announced spin-off of its cloud division. Quarterly results were roughly in line with Street expectations, with strength in profitability. We retain conviction that Alibaba is well positioned to benefit from the ongoing growth in online commerce and cloud development in China. While the company is seeing early progress in its efforts to re-invigorate customer engagement and retention as well as merchant investment initiatives, we believe this investment will likely take some time to flow through to accelerating earnings growth. As such, we remain investors but have reduced our position as we monitor further progress.”

See also 10 Oversold Large Cap Stocks to Buy and 15 High Growth Large Cap Stocks to Invest In.