Investors eye discounted S&P 500 stocks Constellation Brands, Lululemon

The stock market has recently seen a drop after a strong period of growth. The S&P 500 reached a price-to-earnings (P/E) ratio of 30, above its historical average of 16. This correction provides a chance to invest in quality stocks that are currently undervalued. Two notable stocks to consider are Constellation Brands and Lululemon Athletica. Constellation Brands is a leading beverage company that owns popular beer and wine brands. The stock is currently undervalued with a forward P/E of 12.5 and offers a solid dividend yield of 2.27%. Despite recent challenges, including low sales growth and import tariffs, management forecasts a 4% to 7% increase in beer sales for the upcoming fiscal year. Constellation's beer segment is growing faster than the industry, especially among younger consumers. Investors may see a significant return if the stock rebounds to its historic valuation. Lululemon Athletica, known for its yoga-inspired apparel, has experienced flat stock performance recently despite a 400% increase over the past decade. The company expects to nearly triple its revenue by 2026. Lululemon’s stores outperform in sales and e-commerce accounts for a growing part of its revenue. Despite a slower growth rate compared to its past, the company continues to expand globally and into new product categories. Its forward P/E of 21 is attractive, suggesting potential for strong market returns in the future. Both Constellation and Lululemon present appealing investment opportunities in the current market.