Wells Fargo’s ‘Value Equity’ stocks: VZ, AZO, KR, and more

Wells Fargo analysts presented a list of stocks that are trading at a discount and that have the potential to reduce or eliminate it.

These stocks may generate attractive returns in the long term, as their stock price adjusts to reflect the underlying fundamentals of each company.

“We focus on companies that we consider to be well positioned within their industries and seek to enhance diversification by including choices from a variety of industries and sectors,” wrote Analyst Ian Mikkelsen.

The stocks have a minimum market cap of $4B and a big revenue base. Analysts consider valuation relative to history, their peers and the broader market; long-term growth potential; return on invested capital; stability of revenues and earnings; stock price volatility; and financial strength.

Here is the Value Equity List, broken down by sector:

Communication services

• Verizon Communications Inc. (VZ) – Consensus next-12-months EPS estimate: $4.64; Next-12-month P/E: 9.7x
• The Walt Disney Co. (DIS) – Consensus next-12-months EPS estimate: $5.11; Next-12-month P/E: 18.4x

Consumer discretionary

• AutoZone Inc. (AZO) – Consensus next-12-months EPS estimate: $156.24; Next-12-month P/E: 20.3x
• General Motors Co. (GM) – Consensus next-12-months EPS estimate: $9.48; Next-12-month P/E: 4.7x
• Las Vegas Sands Corp. (LVS) – Consensus next-12-months EPS estimate: $2.46; Next-12-month P/E: 21.0x
• Ulta Beauty Inc. (ULTA) – Consensus next-12-months EPS estimate: $23.91; Next-12-month P/E: 15.9x

Consumer staples

• The Kroger Co. (KR) – Consensus next-12-months EPS estimate: $4.55; Next-12-month P/E: 12.5x
• Mondelez International Inc. (MDLZ) – Consensus next-12-months EPS estimate: $3.49; Next-12-month P/E: 20.9x
• Target Corp. (TGT) – Consensus next-12-months EPS estimate: $9.99; Next-12-month P/E: 15.2x

Energy

• Halliburton Co. (HAL) – Consensus next-12-months EPS estimate: $3.21; Next-12-month P/E: 9.3x
• Exxon Mobil Corp. (XOM) – Consensus next-12-months EPS estimate: $7.95; Next-12-month P/E: 15.1x

Financials

• Chubb Ltd. (CB) – Consensus next-12-months EPS estimate: $22.37; Next-12-month P/E: 13.1x
• Citigroup Inc. (C) – Consensus next-12-months EPS estimate: $6.22; Next-12-month P/E: 9.9x
• JPMorgan Chase & Co. (JPM) – Consensus next-12-months EPS estimate: $16.24; Next-12-month P/E: 12.8x
• Markel Group Inc. (MKL) – Consensus next-12-months EPS estimate: $91.91; Next-12-month P/E: 17.1x
• Principal Financial Group Inc. (PFG) – Consensus next-12-months EPS estimate: $7.95; Next-12-month P/E: 10.7x

Health care

• Centene Corp. (CNC) – Consensus next-12-months EPS estimate: $6.53; Next-12-month P/E: 11.3x
• CVS Health Corp. (CVS) – Consensus next-12-months EPS estimate: $6.83; Next-12-month P/E: 9.0x
• Gilead Sciences Inc. (GILD) – Consensus next-12-months EPS estimate: $6.49; Next-12-month P/E: 12.9x
• Medtronic Plc (MDT) – Consensus next-12-months EPS estimate: $5.55; Next-12-month P/E: 16.2x

Industrials

• Emerson Electric Co. (EMR) – Consensus next-12-months EPS estimate: $5.78; Next-12-month P/E: 18.9x
• Honeywell International Inc. (HON) – Consensus next-12-months EPS estimate: $10.53; Next-12-month P/E: 19.6x
• PACCAR Inc. (PCAR) – Consensus next-12-months EPS estimate: $7.67; Next-12-month P/E: 12.8x
• Union Pacific Corp. (UNP) – Consensus next-12-months EPS estimate: $11.60; Next-12-month P/E: 21.2x

Information technology

• Applied Materials Inc. (AMAT) – Consensus next-12-months EPS estimate: $9.33; Next-12-month P/E: 21.1x
• Check Point Software Technologies Ltd. (CHKP) – Consensus next-12-months EPS estimate: $9.56; Next-12-month P/E: 19.8x
• Microchip Technology Inc. (MCHP) – Consensus next-12-months EPS estimate: $2.17; Next-12-month P/E: 35.7x
• Western Digital Corp. (WDC) – Consensus next-12-months EPS estimate: $7.84; Next-12-month P/E: 8.5x

Materials

• DuPont de Nemours Inc. (DD) – Consensus next-12-months EPS estimate: $4.08; Next-12-month P/E: 21.6x
• PPG Industries Inc. (PPG) – Consensus next-12-months EPS estimate: $8.57; Next-12-month P/E: 15.3x

Real estate

• Simon Property Group Inc. (SPG) – Consensus next-12-months EPS estimate: $12.27; Next-12-month P/E: 13.8x