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Just For You 3 Undervalued Names Too Cheap to IgnoreSubmitted by Nathan Reiff. Article 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.
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 fairly sizable firms are trading at attractive valuations and offer potential for share price appreciation alongside fundamental growth. The companies below all represent potential value plays, with value metrics that are historically low and/or competitive relative to peers across industries or the broader market. They offer added benefits, including compelling dividends or promising new product developments. While value opportunities may be harder to find when many promising companies have already drawn renewed investor attention — and when some apparent value plays have deteriorating operations or other red flags — well-established and stable names can still present attractive prospects. Even After Rally, Merck May Be Undervalued, With Careful Planning for Keytruda in the Works Although shares have climbed by more than 28% in the last 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 close to 27. Analysts expect continued growth: the company is projected to see earnings climb nearly 10% in the coming year and has a 5% additional upside in the near term. Helping to drive Merck's momentum is its pembrolizumab cancer drug, Keytruda, which was approved for subcutaneous injection by the European Commission in late 2025 and reached about $8.4 billion in sales in Q4 2025, an increase of almost 7% year over year. Keytruda also shows promise for ovarian cancer, potentially drawing interest from a new group of patients. These trends should help Merck continue to build revenue as it prepares for Keytruda's loss of patent exclusivity in 2028. Merck's drug portfolio is broadening; it recently announced notable phase 3 trial results for clesrovimab-cfor (Enflonsia), a treatment for RSV in young children. At the same time, the company is taking strategic steps ahead of Keytruda's patent expiration, dividing its human health branch into two separate units to better expand its 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 faced pressure from tariffs and inflation. In Q1 fiscal 2026, which ended Nov. 2, 2025, the company posted modest year-over-year declines in organic net sales and consumption, with adjusted earnings per share (EPS) falling 13%. The company has not yet seen 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, improvements in its supply chain and strong brand loyalty—particularly for premium offerings—should provide some protection. Shifting tariff dynamics may also ease the pressure the company currently faces. On top of that, Campbell's remains an attractive dividend play, offering an impressive yield of 5.9%, although its payout ratio is fairly high at over 80%. Moreover, Campbell's P/E ratio of 13.5 is the lowest it has been in about four years. These factors may convince some investors the stock is worth the risk, despite caution among Wall Street analysts. A Recent US Foods Rally May Continue — Bottom-Line Growth Remains in Place Foodservice distribution leader US Foods (NYSE: USFD) experienced a share-price trajectory almost directly opposite Campbell's—in the last year, shares have climbed by about 33%. Still, its P/E ratio remains reasonable compared with the broader market at 31.6. On fundamentals, US Foods is making meaningful strides: the company reported improving 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 firm gain traction. With a $4 billion capital deployment strategy in place, US Foods is well-positioned to sustain revenue growth momentum and continue improving adjusted EBITDA. Analysts view USFD shares as a Moderate Buy based on 11 Buys and 2 Holds, with roughly 15% upside potential.
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