S&P 500 stocks now significantly undervalued, analysts recommend

Stocks have dropped significantly in recent weeks, leading some well-known companies to trade at low prices compared to their past valuations. The S&P 500 index fell about 7.5% recently, while the Dow Jones lost around 6%, and the Nasdaq Composite decreased by 11.4%. This downturn raises concerns about the economy and geopolitical issues but may also present good buying opportunities for investors. Using data from LSEG, CNBC Pro identified S&P 500 companies that analysts highly recommend and are currently undervalued. These stocks are trading between 25% and 50% below their average price-to-earnings ratios from the past five years. Each stock carries a consensus buy rating, and analysts predict price increases of at least 30% over the next year. Technology stocks, including Amazon, have suffered in this market slump. Amazon's shares fell roughly 12% recently and are now 38% below their five-year average P/E ratio. Analysts are optimistic about Amazon, suggesting a potential rise of over 35% in share price. JPMorgan recently reaffirmed its support for Amazon, highlighting its competitive advantages during economic downturns. The energy sector has performed better this year, with companies like Diamondback Energy and Devon Energy standing out. Diamondback's shares are down 13% over the past six months, while Devon's have dropped 26% in the last year. Both companies are trading significantly below their five-year average P/E ratios, making them attractive options for investors. Other notable stocks identified include Salesforce, Adobe, and Target. Analysts believe these companies could recover strongly as market conditions improve.