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Special Report 3 Undervalued Names Too Cheap to IgnoreWritten by Nathan Reiff. Date Posted: 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.
- Special Report: [Sponsorship-Ad-6-Format3]
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, several fairly 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 valuation metrics that are historically low and/or competitive relative to peers or the broader market. They offer added benefits, including compelling dividends or promising new product developments. While value opportunities can be harder to find when many high-growth names are drawing renewed investor attention — and some apparent value plays have deteriorating operations or other red flags — well-established and stable names can still present compelling prospects. Even After Rally, Merck May Be Undervalued, With Careful Planning for Keytruda in the Works 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 nearly 10% in the coming year and has about 5% near-term upside. Driving Merck's momentum is its pembrolizumab cancer drug, Keytruda, which was approved for subcutaneous injection by the European Commission 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 in ovarian cancer treatments, potentially expanding its patient base. These dynamics should help Merck continue to build revenue as it prepares for Keytruda's patent expiration in 2028. Merck's drug portfolio is broadening, including recent phase 3 trial results for clesrovimab-cfor — marketed as Enflonsia — a treatment for RSV in young children. At the same time, the company is making strategic structural moves as it prepares for Keytruda's patent expiration, splitting its human health business into two units to more easily expand non‑cancer drug sales. A Difficult External Situation Pressures Campbell's, But Strong Dividend and Value Remain Factors Campbell's (NASDAQ: CPB) shares have fallen about 37% over the last year as the food-and-beverage staple has been pressured by 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% compared with the prior year. The company has yet to see notable margin improvement after initiating cost-saving measures. The near term will likely remain challenging for the iconic food brand, as fiscal-year guidance is weak overall. However, improving supply-chain operations and strong brand loyalty — particularly for premium offerings — should help protect the business. Shifts in tariff policies may also ease some external pressure. Campbell's remains an attractive dividend play, offering an impressive yield of 5.9%, though its payout ratio is relatively high at more than 80%. Moreover, Campbell's P/E ratio of 13.5 is the lowest in about four years. Those factors may convince some investors the stock is worth the risk, despite caution among Wall Street analysts. A Recent US Foods Rally May Continue, and Bottom-Line Growth Remains in Place Foodservice distribution leader US Foods (NYSE: USFD) saw almost the opposite share trajectory of Campbell's — shares are up about 33% over the past year. Still, its P/E ratio of about 31.6 remains moderate relative to some high-growth names. On fundamentals, US Foods is making important progress: the company reported improving profitability in the latest quarter and full-year adjusted EBITDA gains of 11% year over year. Better inventory management and cost-of-goods savings are helping the firm gain traction. With a robust $4 billion capital deployment strategy, US Foods is well positioned to sustain revenue growth and continued gains in adjusted EBITDA. Analysts rate USFD as a Moderate Buy (11 Buys, 2 Holds), with roughly 15% upside potential.
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