3 Buying Opportunities Worth Visiting in Today’s Market News ad

Some stocks in the market should never sell off, and some brands and business models are widely known to be durable and relatively impervious to volatility. However, from time to time the system produces unexpected events for these companies, rendering most volatility models useless and leaving most investors waiting for answers.

Shares of three retail companies that could easily undermine the case for much of the consumer goods sector sold off today on speculation that the newly appointed head of the US Department of Health will take a negative stance on fast food brands. While these speculations are somewhat correct, it is clear that these stocks may have overreacted to the news, and this is where value investors may come into play.

The shares in question are Coca-Cola Company. NYSE: K.O., PepsiCo Inc. NASDAQ: PEPand even a global franchising giant McDonald’s company. New York Stock Exchange: MCD. It’s shocking, but true, that all three stocks briefly participated in the “everything rally” that followed the US presidential election days, only to give up those gains after the new designation. Here’s why the market may have overextended itself and where these names are headed next.

Coca-Cola’s global moat: How its international presence protects against market sell-offs

Even in the unlikely scenario that people reduce their consumption of Coca-Cola products despite any health campaigns, Coca-Cola will still be able to mitigate and offset these trends through the global presence it has developed and maintained over decades.

What’s more, inflation in the United States, which has recently been threatening to return, could be another tailwind for the brand that could offset any drop in sales. Why? Because market penetration and brand loyalty will outpace any necessary price increases to maintain profits, and few companies can say that today.

With Coca-Cola shares now trading at just 85% of their 52-week high, a 15% selloff is enough to get Wall Street’s attention, and here’s what investors can check to confirm it. Truist Financial analysts have decided to reiterate their Buy rating on Coca-Cola stock, this time coupled with higher valuations.

They previously priced Coca-Cola shares at $70 per share, but the recent push for outperformance despite today’s implications has led them to set a $80 price target for Coca-Cola shares. This target implies a net upside of up to 27% from today’s levels, not to mention a new all-time high.

PepsiCo Stock Hit Cyclical Low: Why It’s a Can’t-Miss Buy Today

This is another name synonymous with Coca-Cola’s international presence. It has enough diversification into other products, such as energy drinks and snacks, to easily offset any negative effects of new health policies in the United States.

The price is currently trading at 87% of its 52-week high, and the price-to-high ratio isn’t even the best part of this discount story. PepsiCo’s forward P/E ratio of 18.7x would be its lowest valuation in six years, second only to the COVID-19 sell-off.

To return to its normal historical average, PepsiCo stock’s forward P/E would need to rise to 25.0x, which is a significant increase from where it sits today and exactly where the source of potential upside for PepsiCo investors would be.

Investors shouldn’t be surprised to learn that Bank of America analysts recently maintained a Buy rating on Pepsi stock while estimating its fair value at $185 per share, representing 17% upside from today’s levels. As if all this evidence wasn’t enough, there is one more indicator they should be aware of.

That indicator is institutional buying, especially from State Street, which recently added 5.1% to its PepsiCo position through November 2024, bringing its holdings to a high today of $9.7 billion, or 4.2% ownership in the company.

McDonald’s Stock: Why the Multibillion-Dollar Giant Offers Rare Double-Digit Upside Potential

It’s not often you see a company as big as McDonald’s, with a market capitalization of $208 billion, offering double-digit growth potential in the market today, but Wall Street analysts are betting on what will happen in the coming quarters.

Most notably, Truist Financial now sees a $342 valuation for McDonald’s stock after rating it a Buy at the end of October 2024. To prove these analysts right, the stock would need to rise as much as 18% from where it is trading today. not to mention reaching a new all-time high to join Coca-Cola’s rise.

It goes without saying that the brand’s penetration into virtually every economy in the world, as well as its convenience and accessibility, make the stock a compelling buy in any downturn. Even bears know this, which is why McDonald’s short interest rates are down as much as 7.4% in the last month alone, a sign of bearish capitulation.

So, whatever story the market wants to ascribe to this selloff, it likely won’t hold up to all this potential growth and strength, and that’s one trend investors can—and should—take advantage of today.

Before you consider Coca-Cola, here’s what you need to hear.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now, before the broader market takes hold… and Coca-Cola wasn’t on the list.

While Coca-Cola currently has a Moderate Buy rating among analysts, the top-rated analysts think these five stocks are Strong Buys.

View five stocks here

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