In this article, we will look at the 7 Affordable Stocks With Good Earnings Growth for 2026.
On December 29, Jeremy Siegel, professor emeritus of finance at the University of Pennsylvania and chief economist at WisdomTree, appeared on CNBC’s “Squawk Box” to talk about the outlook for 2026. He stated that there are a few potential bumps in January, including the Supreme Court perhaps announcing its decision on tariffs, another potential government shutdown, and a potential announcement from President Trump about who the next Fed chairman might be. These are significant factors to consider in addition to the GDP, earnings, and margins. So while the market does need to get through these bumps on the road, if it does so successfully, 2026 looks like a positive year, according to Siegel.
Separately, Tony Pasquariello, Goldman Sachs’ head of hedge fund client coverage, appeared on CNBC’s ‘Closing Bell’ on December 22 to talk about how investors should position their portfolio in 2026.
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He was of the view that the big dynamics in the game are still favorable for risk. The Fed would continue to provision more liquidity as we have a cyclical upswing in the economy, and S&P earnings are up 12% next year following around 11% this year. Therefore, Pasquariello thinks that the interplay between the Fed and the economy’s trajectory alongside this earnings growth is affirmative of a bull market and a primary trend that is still higher.
He added that some of the recent broadening, where the burden of leadership has shifted from AI names and mega-cap tech to large-cap cyclicals, is a good thing and consistent with his view that the economy is going to pick up a bit of speed.
With these trends in view, let’s look at the affordable stocks with good earnings growth for 2026.
Our Methodology
We sifted through financial media reports, ETFs, and stock screeners to find undervalued stocks (with a forward P/E below 15) that have good earnings growth expectations for 2026. Additionally, we have mentioned the year-over-year earnings growth for each company. We selected the top 9 stocks with the highest number of hedge fund holders as of Q3 2025, sourcing the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund holders.
Note: All data was recorded on December 29.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
7 Affordable Stocks With Good Earnings Growth for 2026
7. Barclays PLC (NYSE:BCS)
EPS Diluted Growth (YoY): 45.84%
EPS Diluted Growth (FWD): 28.17%
Forward P/E: 11.12
Number of Hedge Fund Holders: 28
Barclays PLC (NYSE:BCS) is one of the best affordable stocks with good earnings growth for 2026. Barclays PLC (NYSE:BCS) announced on December 17 a collaboration with ExpectAI, which is a pioneering tech company that leverages AI to help small and medium-sized businesses expand their profits through the use of sustainability insights. The company reported that it would begin testing ExpectAI’s Una platform from early 2026, employing publicly available information. The AI-driven platform would create “digital twins” of SME operations, delivering actionable and clear insights.
Una’s objective is to offer businesses specialized energy-efficiency recommendations, an adaptive carbon profile, and connections to verified funding partners and solution providers to expedite implementation. Barclays PLC (NYSE:BCS) further reported that testing would assess the platform’s potential to create value for UK-based businesses, which encompasses how AI-powered business insights can convert sustainability opportunities into measurable improvements in cost efficiency, productivity, and competitiveness.
In a separate development, Kepler Capital reaffirmed a Buy rating on Barclays PLC (NYSE:BCS) on December 11 and set a price target of p460.00. Similarly, UBS maintained a Buy rating on the stock on December 9 with a p515 price target. Barclays PLC (NYSE:BCS) also received a rating update from Citi on December 1, with the firm lifting the price target to 440 GBp from 415 GBp while keeping a Neutral rating on the shares.
Headquartered in London, Barclays PLC (NYSE:BCS) is a bank holding company that provides credit cards, retail banking, wealth management, and corporate and investment banking services. Its operations are divided into the following segments: Barclays United Kingdom (UK), Barclays United Kingdom (UK) Corporate Bank, Barclays Private Bank and Wealth Management, Barclays Investment Bank, Barclays United States (US) Consumer Bank, and Head Office.
6. LATAM Airlines Group S.A. (NYSE:LTM)
EPS Diluted Growth (YoY): 60.40%
EPS Diluted Growth (FWD): 30.69%
Forward P/E: 11.38
Number of Hedge Fund Holders: 30
LATAM Airlines Group S.A. (NYSE:LTM) is one of the best affordable stocks with good earnings growth for 2026. Barclays reaffirmed a Buy rating on LATAM Airlines Group S.A. (NYSE:LTM) on December 10 and set a price target of $60.00. The rating update came after the company reported its preliminary monthly statistics for November 2025 on December 8, reporting that it transported 7.4 million passengers, reflecting a 4.9% year-over-year growth. Furthermore, it transported 79.6 million passengers between January and November.
LATAM Airlines Group S.A. (NYSE:LTM) added that it expanded its consolidated capacity, measured in available seat-kilometers (ASK), by 4.6% compared to the prior year period, with the growth primarily attributed to an 11.4% growth in LATAM Airlines Brazil’s domestic capacity, along with a 4.0% growth in international operations. Two international routes were inaugurated during the month, including Santiago (Chile) – Belo Horizonte (Brazil) and Bogotá (Colombia) – Belém (Brazil).
Management further reported that consolidated traffic, measured in revenue passenger-kilometers (RPK), grew 3.6% in November, and the domestic market in LATAM Airlines Brazil stood out because of a 12.1% year-over-year increase. Resultantly, LATAM Airlines Group S.A.’s (NYSE:LTM) load factor reached 85.4% in November.
In a separate development, Goldman Sachs lifted the price target on LATAM Airlines Group S.A. (NYSE:LTM) to $58.50 from $50.90 on December 5 and maintained a Buy rating on the stock. The firm told investors that it believes there is room for up to a 14% dividend yield in 2026, based on the firm’s published figures.
LATAM Airlines Group S.A. (NYSE:LTM) provides passenger air transportation and cargo services. The company operates through the Air Transport segment, which corresponds to the route network for air transport.
5. Urban Outfitters, Inc. (NASDAQ:URBN)
EPS Diluted Growth (YoY): 51.24%
EPS Diluted Growth (FWD): 23.70%
Forward P/E: 14.56
Number of Hedge Fund Holders: 41
Urban Outfitters, Inc. (NASDAQ:URBN) is one of the best affordable stocks with good earnings growth for 2026. Urban Outfitters, Inc. (NASDAQ:URBN) received several rating updates in December. On December 17, Baird lifted the price target on the stock to $93 from $90 and maintained an Outperform rating on the shares. The firm told investors that it sees the backdrop improving in 2026, with consumer stimulus, including tariff mitigation, wealth effects, and lower taxes, setting the stage for solid revenue and earnings growth. This holds especially true after tariffs are cycled in the first half.
The same day, Urban Outfitters, Inc. (NASDAQ:URBN) was upgraded to Outperform from Market Perform by Telsey Advisory, who lifted the price target on the stock to $98 from $85. The firm detailed in a year-ahead note for the retail group that improvements at the flagship banner translate to growth in business across the company’s brand portfolio. It also cited new concept growth with Nuuly and Free People.
In another development, Urban Outfitters, Inc. (NASDAQ:URBN) was initiated with a Neutral rating by Guggenheim on December 9, without a price target. The firm believes that the retail sector still appears to be perceived as “structurally sick.” However, it also noted that “holiday brought the cheer,” tariffs have been manageable so far, and the “most importantly and likely going unnoticed” fact is that a majority of the coverage actually operates at, or close to, their gross margin peaks.
Goldman Sachs also initiated coverage of Urban Outfitters, Inc. (NASDAQ:URBN) the same day, setting a Neutral rating with a $83 price target. It exhibited positive sentiments over the company’s market positioning in specialty retail, telling investors that its solid brand momentum is allowing a “healthy” growth in core brands. However, the firm added that this positive trend is offset by Urban Outfitters, Inc.’s (NASDAQ:URBN) execution risk and the stock’s “full” valuation, painting a balanced risk/reward picture at the current share levels.
Urban Outfitters, Inc. (NASDAQ:URBN) is a lifestyle products and services company that operates through three segments: Retail, Wholesale, and Nuuly. The Retail segment encompasses its store and digital channels and manages the Anthropologie, Free People, FP Movement, and Urban Outfitters brands. The Nuuly segment comprises the Nuuly brand, which includes Nuuly Thrift and Nuuly Rent, a monthly women’s apparel subscription rental service.
4. Halozyme Therapeutics, Inc. (NASDAQ:HALO)
EPS Diluted Growth (YoY): 56.68%
EPS Diluted Growth (FWD): 51.99%
Forward P/E: 11.01
Number of Hedge Fund Holders: 41
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is one of the best affordable stocks with good earnings growth for 2026. Halozyme Therapeutics, Inc. (NASDAQ:HALO) announced on December 18 that Johnson & Johnson received approval from the U.S. Food and Drug Administration (FDA) for RYBREVANT FASPRO, co-formulated with ENHANZE® for people with epidermal growth factor receptor (EGFR)-mutated locally advanced or metastatic non-small cell lung cancer. RYBREVANT FASPRO holds approval across all indications of RYBREVANT, and marks the first and only subcutaneously administered targeted therapy for patients with EGFR+ mNSCLC.
Management further reported that RYBREVANT FASPRO delivered a significant reduction in administration time from several hours to around five minutes when compared to intravenous delivery, and exhibited an approximately fivefold reduction in administration-related reactions; 13% in subcutaneous compared to 66% in intravenous arm. Dr. Helen Torley, president and chief executive officer of Halozyme Therapeutics, Inc. (NASDAQ:HALO), stated that RYBREVANT FASPRO holds the potential to make administration more convenient and faster for patients due to the company’s leading ENHANZE drug delivery technology.
In a separate development, Halozyme Therapeutics, Inc. (NASDAQ:HALO) received a rating update from TD Cowen on December 5, who reaffirmed a Buy rating on the stock with a $79 price target. However, Halozyme Therapeutics, Inc. (NASDAQ:HALO) was downgraded to Sell from Neutral by Goldman Sachs on December 4, with the firm setting a $56 price target. The firm told investors that a central debate for the company is the long-term value of its Enhanze royalty model, which faces a considerable post-2030 revenue cliff with around 70% of the royalties rolling off on the contract between 2030 and 2035. Typical business-development pacing appears inadequate to offset this trend, according to the firm.
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is a biopharmaceutical technology platform company that develops, manufactures, and commercializes drug-device combination products through advanced auto-injector technology. They offer commercial or functional benefits, including increased patient comfort and adherence, and enhanced tolerability and convenience.
3. The Progressive Corporation (NYSE:PGR)
EPS Diluted Growth (YoY): 32.42%
EPS Diluted Growth (FWD): 37.74%
Forward P/E: 12.68
Number of Hedge Fund Holders: 84
The Progressive Corporation (NYSE:PGR) is one of the best affordable stocks with good earnings growth for 2026. Wells Fargo reaffirmed a Hold rating on The Progressive Corporation (NYSE:PGR) on December 23 and lowered the price target on the stock to $242 from $247. The firm told investors that the company traded down with a continual slowing of PIF growth, adding that the inflection in agency from growth to declines points towards increased competitive market dynamics. Wells Fargo thus sees shares stuck until The Progressive Corporation (NYSE:PGR) shows a reacceleration in PIF growth.
The Progressive Corporation (NYSE:PGR) also received a rating update from BMO Capital on December 18, with the firm lowering the price target on the stock to $253 from $256 while keeping a Market Perform rating on the shares. The firm stated that the company’s premium per policy pricing surprised to the upside by over two percentage points for the second consecutive month, and is overall running modestly positive quarter-to-date. However, it added that the real-time Auto rate filings hint at a continual low-single-digit pricing decline going into December.
The rating update came after The Progressive Corporation (NYSE:PGR) reported its November 2025 results on December 17, with net premiums written for the month reaching $6.193 billion and reflecting an 11% growth compared to November 2024. Net premiums earned for the month $6.894 billion, up 14% year over year, while net income was $958 million, reflecting a drop of 5% compared to the prior year period. Management further reported that the diluted earnings per share available to common shareholders were $1.63, down 5% compared to $1.71 in November 2024.
The Progressive Corporation (NYSE:PGR) is an insurance holding company that provides residential property insurance, personal and commercial auto insurance, and other specialty property-casualty insurance and related services. The company operates through the Personal Lines, Commercial Lines, and Property segments.
2. Merck & Co., Inc. (NYSE:MRK)
EPS Diluted Growth (YoY): 58.08%
EPS Diluted Growth (FWD): 76.45%
Forward P/E: 11.90
Number of Hedge Fund Holders: 92
Merck & Co., Inc. (NYSE:MRK) is one of the best affordable stocks with good earnings growth for 2026. On December 19, Merck & Co., Inc. (NYSE:MRK) announced a historic agreement with the Trump administration to ensure the accessibility and affordability of its medicines for Americans, and reported that it plans to provide key products at affordable prices for eligible patients in the US through a direct-to-patient program. The plan currently includes JANUVIA, JANUMET, and JANUMET XR, and would be expanded in the future to include enlicitide decanoate after FDA approval. The direct-to-patient program would allow the availability of JANUVIA, JANUMET, and JANUMET XR to eligible American patients at a cash price, which reflects an approximately 70% discount from the current list price.
Merck & Co., Inc. (NYSE:MRK) announced another development on December 17, reporting positive topline results from the Phase 3 KEYNOTE-B15 trial in patients with muscle-invasive bladder cancer eligible for cisplatin-based chemotherapy. The trial showed that when administered as a neoadjuvant and adjuvant treatment (before and after surgery), KEYTRUDA plus Padcev exhibited a statistically significant and clinically meaningful improvement in event-free survival, overall survival, and pathologic complete response rates compared to neoadjuvant chemotherapy and surgery.
The trial was conducted in collaboration with Pfizer and Astellas, building on the clinical success of the combination in locally advanced or metastatic urothelial cancer (la/mUC) and cisplatin-ineligible MIBC.
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions to advance the treatment and prevention of diseases in animals and people. Its Pharmaceutical segment offers vaccines and human health pharmaceutical products, typically therapeutic and preventive agents. Its Animal Health segment develops, discovers, manufactures, and markets a range of vaccines and veterinary pharmaceutical products.
1. Micron Technology, Inc. (NASDAQ:MU)
EPS Diluted Growth (YoY): 204.55%
EPS Diluted Growth (FWD): 209.33%
Forward P/E: 8.86
Number of Hedge Fund Holders: 105
Micron Technology, Inc. (NASDAQ:MU) is one of the best affordable stocks with good earnings growth for 2026. Rosenblatt Securities analyst Kevin Cassidy raised the price target on Micron Technology, Inc. (NASDAQ:MU) to $300 to $500 on December 18 while reaffirming a Buy rating on the shares. The same day, Deutsche Bank also lifted the price target on the stock to $300 from $280 while keeping a Buy rating.
Both the ratings came after Micron Technology, Inc. (NASDAQ:MU) reported its fiscal Q1 2026 results on December 17 that exceeded Wall Street expectations. Deutsche Bank told investors that Micron Technology, Inc. (NASDAQ:MU) reported “another stunning” quarter and outlook, surpassing “lofty” expectations on pricing and gross margin strength. It added that the company’s disciplined spending and solid technological execution are leading to a “paradigm shift in the memory sector”.
Micron Technology, Inc. (NASDAQ:MU) reported that revenue for fiscal Q1 2025 reached $13.64 billion compared to $11.32 billion for the prior quarter and $8.71 billion for the same period last year. It delivered record revenue and substantial margin expansion, and the company’s Q2 outlook reflects considerable records across EPS, free cash flow, gross margin, and revenue as it expects its business performance to continue strengthening through fiscal 2026.
Micron Technology, Inc. (NASDAQ:MU) provides innovative memory and storage solutions. Its operations are divided into the following segments: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Embedded Business Unit (EBU), and Storage Business Unit (SBU).
While we acknowledge the potential of MU 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 MU and that has 100x upside potential, check out our report about this cheapest AI stock.
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