MW 10 stocks Wall Street expects to roar back after dropping at least 20% in 2026
By Philip van Doorn
A screen incorporating value and growth factors yields a list of stocks analysts expect to soar at least 46% over the next 12 months
Four of the 10 companies passing a screen of stocks in the S&P 500 that have declined at least 20% this year and have low P/E valuations and high projections for revenue growth going out two years, relative to their sectors.
On Monday, the Dow Jones Industrial Average fell nearly 822 points, which made for some dire headlines. And a broader look at the stock market showed that, among the S&P 500, two-thirds of stocks were down for the day.
But what about gains and losses for 2026? Through Monday's close, the S&P 500 SPX was down 1%, while 131 of the component stocks had declined at least 5%, 97 were down at least 10% and 54 were down at least 20%.
We screened the 54 stocks in the S&P 500 showing declines of at least 20% through Monday, as follows:
-- Forward price-to-earnings ratios below those in the companies' sectors. These are Monday's closing prices divided by consensus earnings-per-share estimates for the next 12 months among analysts working for brokerage and research firms polled by LSEG. For the 11 sectors of the S&P 500 (and for the full index), P/E ratios are weighted by market capitalization. For the full S&P 500, the forward P/E ratio is 21.6.
-- Two-year projected revenue compound annual growth rate (CAGR) higher than that of the company's sector. These are based on consensus revenue estimates for calendar years, as adjusted by LSEG for companies whose fiscal years don't match the calendar.
-- Majority "buy" ratings among the analysts.
All price changes in this article exclude dividends.
The sectors' P/E ratios and sales projections are below. Here are the 10 companies which passed the screen. The data is shown in two tables, as there would be too much information to fit on one.
Here are the 10 stocks that passed the screen, sorted by forward P/E:
Healthcare Sector Forward P/E Two-year estimated revenue CAGR through 2027 $Capital One Financial Corp(COF-N)$. Financials 9.1 11.8% Trade Desk Inc. Class A Communication services 11.0 15.7% IQVIA Holdings Inc. Healthcare 12.6 5.8% KKR & Co Inc. Financials 13.7 29.4% Booking Holdings Inc. Consumer discretionary 14.0 9.6% Block Inc. Financials 14.9 10.7% Oracle Corp. Information technology 18.3 33.4% AppLovin Corp. Information technology 22.7 33.5% ServiceNow Inc. Information technology 23.1 19.4% CoStar Group Inc. Real estate 34.1 15.1% Source: LSEG
Leaving the companies in the same order, here is a summary of analysts' opinions:
Company Share "buy" ratings Feb. 23 price Consensus price target Implied 12-month upside potential Capital One Financial Corp. 79% $190.00 $276.91 46% Trade Desk Inc. Class A 51% $24.17 $54.56 126% IQVIA Holdings Inc. 81% $162.31 $239.88 48% KKR & Co Inc. 91% $92.19 $140.90 53% Booking Holdings Inc. 82% $3,870.83 $5,844.35 51% Block Inc. 73% $50.75 $82.54 63% Oracle Corp. 73% $141.31 $280.40 98% AppLovin Corp. 87% $380.62 $670.26 76% ServiceNow Inc. 92% $100.80 $190.85 89% CoStar Group Inc. 71% $47.87 $77.14 61% Source: LSEG
Click on the tickers for more about each company.
Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page
Capital One $(COF)$ has a forward P/E of 9.1, which is the lowest among the 10 companies passing the screen and down from 11.7 a year ago. The bank has been going through an expensive transition to integrate Discover Financial, which it acquired in May.
The company on the list with the highest percentage of "buy" or equivalent ratings among analysts polled by LSEG is ServiceNow (NOW). The analysts see 89% upside for the shares over the next 12 months, based on the consensus price target and Monday's closing price. Sometimes analysts will have buy ratings on stocks even if their price target is lower than the current price - they might have longer-term factors driving the ratings.
More: ServiceNow CEO looks to call a bottom on software stocks with this $3 million move
Oracle's $(ORCL)$ stock trades at a forward P/E of 18.3, which is well below the forward P/E of 23.9 for the information-technology sector. Oracle has the second-highest projected two-year revenue CAGR on the list.
Here are the forward P/E and sales growth projections for the 11 sectors of the S&P 500, listed in alphabetical order with the full index at the bottom:
Sector Forward P/E Projected 2-year revenue CAGR through 2027
Communication services 20.9 11.5%
Consumer discretionary 27.3 7.5%
Consumer staples 23.3 4.1%
Energy 20.1 1.3%
Financials 15.3 6.4%
Healthcare 18.6 5.7%
Industrials 26.3 7.2%
Information technology 23.9 19.0%
Materials 21.0 5.6%
Real estate 37.4 7.4%
Utilities 18.7 6.2%
S&P 500 21.6 7.9%
Source: LSEG
Here is a summary of how the 11 sectors of the S&P 500 have performed this year, excluding dividends:
The energy sector has led the S&P 500 this year, with a 22.7% gain through Feb. 23.
Don't miss: Business-development companies' stocks have fallen. Some look attractive for the right type of investor.
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 24, 2026 09:01 ET (14:01 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments