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We looked at the average analyst price target for each of the Dow 30 (DJIA) stocks to see which members were the most undervalued by these standards, and also what the price targets were projecting for the index as a whole.

At the moment, analysts think INTC is the most undervalued Dow stock, with a price target nearly 30% above its current price. INTC is followed by HD, MMM, and GE. Only MRK is considered overvalued, and even that is by a slim margin of 64 bps:

Using the price targets of the 30 stocks, we come up with a price target on the index of 12,435, 14.26% above its current level of 10,900. From these figures we can conclude one of two things: either the future looks pretty bright for U.S. markets, or (as is more often the case) analysts are being too optimistic.

Source: Analysts' Optimistic Expectations For Dow Stocks (INTC, HD, MMM, GE, MRK)