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Looking for undervalued stocks? Value investors look for opportunities to buy stocks that are trading at significant discounts to their fair value, with the assumption that they’ll move up to their fair value in the near future. One proxy for fair value is analyst target price.

We ran a screen on the S&P 500 for stocks trading at the steepest discounts to their analyst target prices, which may indicate that they are undervalued.

But because target prices are notoriously inflated, we only used the most pessimistic (the lowest) target prices, and for stocks with sufficient analyst coverage we only screened for stocks with 5 or more analyst ratings.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Use this list as a starting point for your own analysis.

List sorted by potential upside implied by target price.

1. Compuware Corporation (NASDAQ:CPWR): Provides software and Web performance solutions, professional services, and application services. Market cap of $1.80B. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $10.50. This implies a current upside of 34.79% from current levels around $7.79. The stock has lost 22.3% over the last year.

2. Hartford Financial Services Group Inc. (NYSE:HIG): Provides insurance and financial services in the United States and internationally. Market cap of $7.92B. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $21.00. This implies a current upside of 28.13% from current levels around $16.39. This is a risky stock that is significantly more volatile than the overall market (beta = 2.97). The stock has had a couple of great days, gaining 9.23% over the last week.

3. Bank of America Corporation (NYSE:BAC): Provides banking and financial services to individuals, small- and middle-market businesses, corporations, and governments primarily in the United States and internationally. Market cap of $55.20B. Of the 25 analysts that have set a target price on the stock, the lowest price target stands at $6.50. This implies a current upside of 27.95% from current levels around $5.08. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock has performed poorly over the last month, losing 20.23%.

4. Covidien plc (NYSE:COV): Develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. Market cap of $21.97B. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $56.00. This implies a current upside of 27.88% from current levels around $43.79. The stock has gained 7.89% over the last year.

5. General Electric Company (NYSE:GE): Operates as a technology, service, and finance company worldwide. Market cap of $167.97B. Of the 14 analysts that have set a target price on the stock, the lowest price target stands at $19.00. This implies a current upside of 27.35% from current levels around $14.92. The stock has had a couple of great days, gaining 6.14% over the last week.

6. MetLife, Inc. (NYSE:MET): Provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. Market cap of $33.29B. Of the 18 analysts that have set a target price on the stock, the lowest price target stands at $36.50. This implies a current upside of 26.30% from current levels around $28.90. The stock has had a couple of great days, gaining 7.04% over the last week.

7. MEMC Electronic Materials Inc. (WFR): Engages in the development, manufacture, and sale of silicon wafers for the semiconductor industry worldwide. Market cap of $961.06M. Of the 20 analysts that have set a target price on the stock, the lowest price target stands at $5.00. This implies a current upside of 25.63% from current levels around $3.98. The stock is currently stuck in a downtrend, trading 8.42% below its SMA20, 21.57% below its SMA50, and 51.56% below its SMA200. The stock has performed poorly over the last month, losing 30.38%.

8. CBRE Group, Inc (NYSE:CBG): Operates as a commercial real estate services company worldwide. Market cap of $5.51B. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $19.00. This implies a current upside of 25.58% from current levels around $15.13. This is a risky stock that is significantly more volatile than the overall market (beta = 2.52). The stock has had a couple of great days, gaining 13.58% over the last week.

9. Peabody Energy Corp. (NYSE:BTU): Engages in the exploration, mining, and production of coal. Market cap of $10.63B. Of the 24 analysts that have set a target price on the stock, the lowest price target stands at $43.00. This implies a current upside of 25.29% from current levels around $34.32. The stock has had a couple of great days, gaining 13.32% over the last week.

10. Halliburton Company (NYSE:HAL): Provides various products and services to the energy industry for the exploration, development, and production of oil and natural gas worldwide. Market cap of $33.86B. Of the 28 analysts that have set a target price on the stock, the lowest price target stands at $42.00. This implies a current upside of 24.89% from current levels around $33.63. The stock has had a couple of great days, gaining 9.49% over the last week.

11. Alpha Natural Resources, Inc. (NYSE:ANR): Engages in the production, processing, and sale of coal in the United States. Market cap of $5.28B. Of the 22 analysts that have set a target price on the stock, the lowest price target stands at $26.00. This implies a current upside of 24.76% from current levels around $20.84. The stock has had a couple of great days, gaining 16.22% over the last week.

12. Time Warner Cable Inc. (NYSE:TWC): Operates as a cable operator in the United States. Market cap of $19.30B. Of the 24 analysts that have set a target price on the stock, the lowest price target stands at $72.00. This implies a current upside of 24.55% from current levels around $57.81. Might be undervalued at current levels, with a PEG ratio at 0.92, and P/FCF ratio at 8.11. The stock has lost 2.7% over the last year.

13. Comcast Corporation (NASDAQ:CMCSA): Provides entertainment, information, and communications products and services in the United States and internationally. Market cap of $61.77B. Of the 24 analysts that have set a target price on the stock, the lowest price target stands at $27.00. This implies a current upside of 24.14% from current levels around $21.75. The stock has had a couple of great days, gaining 5.98% over the last week.

14. QEP Resources, Inc. (NYSE:QEP): Operates as an independent natural gas and oil exploration and production company. Market cap of $5.78B. Of the 13 analysts that have set a target price on the stock, the lowest price target stands at $38.00. This implies a current upside of 23.66% from current levels around $30.73. The stock has had a couple of great days, gaining 6.59% over the last week.

15. JPMorgan Chase & Co. (NYSE:JPM): Provides various financial services worldwide. Market cap of $117.68B. Of the 30 analysts that have set a target price on the stock, the lowest price target stands at $35.00. This implies a current upside of 22.55% from current levels around $28.56. The stock has had a couple of great days, gaining 5.3% over the last week. The stock has performed poorly over the last month, losing 10.9%.

*Target price data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 15 S&P 500 Stocks Most Deeply Undervalued By Target Price