Affordable stocks to consider for long-term investment amid market fluctuations

Following recent market fluctuations, several stocks, including an e-commerce giant and a leading snack manufacturer, now appear undervalued, presenting potential opportunities for long-term investors. Despite a rebound in the three major U.S. indexes, which are now trading above their levels from August 2, many stocks remain significantly below their peak values, offering more appealing valuations. CNBC identified S&P 500 stocks that are considered “cheap” compared to the broader market, using FactSet data. The criteria included a forward valuation lower than the S&P 500’s overall forward price-to-earnings ratio of 22.56, being undervalued relative to their sector and the broader market, having an upside of 10% or more to analysts’ average price target, gaining 5% or more over the past month, and holding a consensus analyst buy or overweight rating.

Among these stocks, PayPal stands out with the highest potential upside of 23.10%, based on an average price target of $78.12. The company’s forward price-to-earnings ratio is 14.1, which is below the broad market index. PayPal’s stock has risen over 7.5% since the beginning of the year and 14% this quarter alone, following better-than-expected second-quarter results that reignited analysts’ interest after nearly three years of underperformance. Bernstein analyst Harshita Rawat upgraded PayPal to outperform on July 31, marking the first upgrade from the firm since it downgraded the stock in 2021. Rawat also increased her price target by $7 to $78, citing improved gross profit trends and e-commerce momentum under new management, predicting consistent performance improvements in the coming quarters.

Mondelez International, the maker of Oreo cookies, is another stock favored by analysts for its attractive valuation. The average price target suggests a potential gain of approximately 13.7%, according to FactSet. Although the stock is down 1.3% year-to-date, it has risen over 9% this quarter following a strong second-quarter performance driven by robust gross margins, despite lower-than-expected organic growth. Goldman Sachs recently included Mondelez in its buy-rated packaged food stocks, with analyst Leah Jordan highlighting the company’s potential for above-average earnings growth and considering it a high-quality core holding. Jordan’s price target of $80 slightly exceeds the consensus target of $78.79.

Molina Healthcare, a Medicare-related stock that has faced challenges this year, is also expected to grow. Despite a more than 6% decline this year, analysts predict a 10.5% increase over the next year, based on FactSet’s average price target. The stock has already rebounded this quarter after Molina reported better-than-expected quarterly results in late July and reaffirmed its strong full-year outlook.

Other potentially undervalued stocks with long-term growth prospects include Hasbro, Kraft Heinz, and Assurant.