Forecast by DotBig: Top-5 undervalued stocks of 2022 that can rock the market
Investors of the stock market are looking for promising assets to put their money in. However, 2022 doesn’t seem to be the best year for stock investments. Why is it so? Are there any low-rated shares that have the prospects to bring good returns under particular conditions in the future? Let’s find this out and specify the top 5 stocks that should be considered a buy these days.
Why do stock prices decrease in 2022?
Many stocks of US-based companies are included in the S&P 500 Index. We have to conclude that this year wasn’t quite successful for investing in these products, because so far, the entire year has been a period of instability in macroeconomics. Today, the forecast for further changes cannot be optimistic because inflation and interest rates don’t seem to stop going up. Plus, the understanding of the fact that the US economy might suffer a big recession soon devalues many stocks that were considered a buy a year ago.
Nevertheless, the fact that current stock prices are going down is not particularly bad for investors who follow long-term strategies. Investors can use the vulnerabilities of today’s market and buy stocks undervalued. If the US economy avoids a recession, investors will be able to enjoy great returns. Today, we are going to speak about the 5 best stocks viewed by DotBig experts as a buy.
- Exxon Mobil
- Bank of America
- Cisco Systems
- AbbVie Inc
On stock exchanges, you will find the Exxon Mobil stock traded under the XOM ticker symbol. This is the biggest US representative of the oil market, whose shares are available for public trade. As of September 15, it was valued at $97.67. Over the course of a year, the XOM stock price has gone up around 54%.
This performance is related to generally satisfying conditions in the US oil market in 2022. The prices of oil have been going up, which contributed to the gradually increasing revenue of Exxon Mobil. DotBig analysts expect the price of this share to hit $115 soon as the company will remain the biggest oil company in the US and oil prices don’t seem to be down in the nearest future.
We consider that the XOM value is underrated right now. It’s the best time to go bullish for this stock asset.
Bank of America
The Bank of America stock is traded on public exchanges under the BAC ticker symbol. Similar to the previously reviewed company, Bank of America is a leader in its sector of the US market. This investment bank is one of the few commercial institutions that might determine trends in the US banking sector.
Although the interest rates are rising, the Bank of America stock investors didn’t benefit from it yet because the shares are down almost 25%. These declining movements are related to concerns about loan growth. Although DotBig analysts agree that these concerns are objective, they also believe that the bank can use the growing interest rates to boost its earnings. That is the reason why we list the BAC stock as a buy today. As of September 15, you can buy this share for $33.87. DotBig experts predict that soon it will be closing at the range of $38–40.
During the COVID-19 pandemic, Pfizer was one of the most frequently discussed corporations. This is because Pfizer managed to create one of the most efficient vaccines against the virus. The sales of the company were also boosted by the collaboration with BioNTech SE and the joint development of boost shots. Although the Pfizer stock is down 22%, compared to the beginning of the year, DotBig experts have all the grounds to consider it a buy.
DotBig analysts expect the earnings of Pfizer to grow after the launch of Paxlovid oral COVID-19 treatment. The COVID-19 pandemic sales won’t be the only catalysts for the increasing earnings of Pfizer. Experts say that it has great business opportunities in other directions as well. That’s why DotBig analysts give the buy indicator to the PFE stock. Currently, as of September 15, it’s valued at $46.15 and has all the capabilities to exceed $65 in the nearest future.
The market of technologies always has prospects for growth that’s why, from the viewed perspective, stocks of the companies in this industry will be demanded. The Cisco Systems stock is one of the biggest undervalued assets in this sector. As of September 15, you can buy it for $43.96, which is nearly 23% lower than a year ago. This declining performance and poor quote history are related to the fact that the Cisco Systems corporation is losing the competition against its main market rivals.
How can the situation change? Experts expect the Cisco Systems stock to recover its price after the global upgrades of the 5G network. The upwards movement is most likely to take a long period of time. Since the stock value doesn’t correspond to the earnings of the company, we expect it to grow from the current $43.96 to around $58–60.
AbbVie is an international pharmaceutical corporation. Its major earnings are produced from the sales of the Humira drug, which is a very successful treatment against rheumatoid arthritis. Many investors are concerned about the AbbVie Inc stock future because of the poor prospects of the company’s major drug. However, market analysts dispel this concern because they expect AbbVie Inc’s earnings to be driven by two other drugs — Skyrizi and Rinvoq. Together, they are expected to generate $15 billion by 2025. Just consider that the previous year their combined share in sales exceeded $4.5 billion.
The value of this stock, which is $139.55, doesn’t correspond to the projected revenue of the company. That’s why DotBig analysts consider ABBV another strong buy in 2022 and predict its price hitting $165.
Final word: what to expect from the stock market in 2023
Above, we listed 5 shares of global companies we consider undervalued as of September 15, 2022. Now, the question is: will the entire stock market be able to recover in 2023, or we will be witnessing gradual dropdowns in stock prices again?
Unfortunately, we cannot provide the exact answer to this question because there are too many unpredictable factors that have a huge impact on the potential stock market recovery. For example, we cannot say for sure what the inflation will be. We can only conclude that this year it hit 8.3%, and in 2023, financial experts expect it to be lower. However, they are still arguing whether it will fall to 1.5% or to 3%.
Alongside this, we cannot predict the potential pressure on supply chains in 2023, which was one of the reasons the market has been volatile throughout 2022. Supply chains heavily depend on the geopolitical situation and on the war started by Russia against Ukraine, in particular.
All we can do is conclude that if all these issues change in 2023, the stock market will have a great chance to recover. We are quite optimistic about them, that’s why we provided this list of the top 5 undervalued stocks.
Choose the assets that will bring gains to your portfolio and invest wisely with DotBig!