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Just For You 3 Undervalued Names Too Cheap to IgnoreBy Nathan Reiff. Published: 3/7/2026. 
Key Points - Several established companies present potential value plays in early 2026 thanks to comparably low P/E ratios and strong fundamentals, despite broader market challenges.
- Merck's recent rally has not compromised its P/E ratio, which remains below the industry average, as the company navigates new ways to grow revenue amid its flagship Keytruda nearing patent expiration.
- Campbell's and US Foods offer contrasting cases: the former experiencing a sharp pullback and a high dividend yield, while the latter rallying amid adjusted EBITDA gains and the potential for further improvement.
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Highly publicized growth trajectories of some of the biggest companies out there may make it seem like 2026 is not a prime time for a value strategy. Still, some sizable firms are trading at attractive valuations and offer potential for share-price appreciation alongside fundamental growth. The companies below represent potential value plays, with metrics that are historically low and/or competitive relative to peers or the broader market. They also offer added benefits, including compelling dividends or promising product developments. While value opportunities can be harder to find when many growth names have regained investor attention — and while some apparent bargains mask deteriorating operations or other red flags — well-established, stable names can still present attractive prospects. Even After a Rally, Merck May Be Undervalued, With Careful Planning for Keytruda Underway Although shares have climbed more than 28% in the past year, bringing its market capitalization to nearly $300 billion, biopharma giant Merck & Co. Inc. (NYSE: MRK) still trades at a price-to-earnings (P/E) ratio of 16.45, well below the medical industry average of roughly 27. Analysts expect continued growth: the company is projected to see earnings climb by nearly 10% in the coming year and has about 5% additional upside in the near term. Driving Merck's momentum is its pembrolizumab cancer drug, Keytruda, which received European Commission approval for subcutaneous injection in late 2025 and reached roughly $8.4 billion in sales in Q4 2025, an increase of nearly 7% year over year. Keytruda also shows promise for ovarian cancer, potentially expanding its patient base. These developments should help Merck build revenue as it prepares for Keytruda's patent expiration in 2028. Merck's portfolio is broadening as well. The company recently announced phase 3 trial results for clesrovimab-cfor (Enflonsia), a treatment for RSV in young children. At the same time, Merck is reorganizing its human health business into two units to make it easier to grow non-oncology drug sales ahead of Keytruda's patent loss. A Difficult External Situation Pressures Campbell's, but Strong Dividend and Value Traits Remain Campbell's (NASDAQ: CPB) shares have fallen about 37% over the last year as the food-and-beverage staple dealt with tariffs and inflation. In Q1 fiscal 2026, which ended Nov. 2, 2025, the company reported modest year-over-year declines in organic net sales and consumption, with adjusted earnings per share (EPS) down 13% over the same period. So far, margin improvement has been limited despite cost-saving measures. The near term will likely remain challenging for the iconic brand, and fiscal-year guidance is weak overall. Still, improving supply-chain execution and strong brand loyalty — particularly for premium offerings — should provide some protection. Shifting tariff dynamics could also ease pressure over time. Importantly for value investors, Campbell's remains a notable dividend play, offering a yield of 5.9%, though its payout ratio is relatively high at over 80%. Its P/E ratio of 13.5 is the lowest in about four years. These factors may lead some investors to view the stock as worth the risk despite Wall Street caution. A Recent US Foods Rally May Continue, and Bottom-Line Growth Remains in Place Foodservice-distribution leader US Foods (NYSE: USFD) has followed a nearly opposite trajectory to Campbell's — shares climbed about 33% over the last year. Its P/E ratio stands at 31.6. On fundamentals, US Foods has shown tangible improvement: the company reported better profitability in the latest quarter and full-year adjusted EBITDA gains of 11% year over year. Stronger inventory management and cost-of-goods savings are helping the company gain traction. With a $4 billion capital deployment plan in place, US Foods is positioned to sustain revenue momentum and continued adjusted-EBITDA expansion. Analysts rate USFD a Moderate Buy based on 11 Buys and 2 Holds, and see roughly 15% upside potential.
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