5 Undervalued Stocks to Buy for February 2025

Investors are always looking for stocks with strong growth potential or stable income at a reasonable price. In February 2025, market volatility, earnings surprises and sector rotation have created opportunities to pick up undervalued stocks that may be poised for upside. This article will highlight five undervalued stocks worth this month, focusing on their metrics, business fundamentals and why they could deliver solid returns.

How these undervalued stocks were chosen

Picking undervalued stocks involves a mix of quantitative and qualitative analysis. For this list, the following criteria were used:

• Valuation measurements: Low price-to-earnings (P/E) or price-to-sales (P/S) ratios compared to industry averages or historical norms.
• Earning potential: Shares with constant or increasing earnings per share (EPS) growth.
• Market sentiment: Stocks with recent declines that may have been oversold due to broader market trends rather than poor fundamentals.
• Yield: Preference for companies with sustainable dividend payouts that provide income and potential price appreciation.
• Future catalysts: Sectors with long-term tailwinds or specific events likely to boost share prices.

5 Undervalued Stocks to Buy in February 2025

1. Intel Corporation (INTC)

Business overview

Intel is a global leader in semiconductor technology, designing and manufacturing microprocessors and other essential components for computers and devices. Its innovations drive advances in computing, artificial intelligence and connected technologies.

Intel, a global leader in semiconductor manufacturing, has faced challenges in recent years as it competes with advanced players such as NVIDIA and AMD. Despite a rocky transition to more advanced process nodes, Intel’s renewed focus on foundry services and AI-powered chips has positioned it for recovery.

Why INTC stock is a top pick

Intel trades at a steep discount to its peers, with a P/E ratio of 14x versus the semiconductor industry average of 25. Additionally, its investments in next-generation manufacturing facilities and government support under the CHIPS Act are expected to provide long-term growth. Intel’s 2.3% dividend provides stable income while investors wait for these initiatives to bear fruit.

2. Target Corporation (TGT)

Business overview

Target is a nationwide retailer that offers a curated selection of affordable and stylish products, from home goods to clothing and groceries. Known for its focus on convenience and customer experience, Target blends brick-and-mortar stores with a robust digital shopping platform.

Target, one of the largest US retailers, has been pressured by slower consumer spending and inventory issues in 2024. However, its strong brand loyalty and strategic cost management make it an undervalued option.

Why TGT Stock is a Top Pick

Target’s 15x P/E ratio is well below its historical average, and the company has a long track record of returning value to shareholders through dividends and buybacks. With a 3.3% yield and improving same-store sales trends, Target appears to be recovering as consumer spending stabilizes.

3. Salesforce, Inc. (CRM)

Business overview

Salesforce dominates the cloud-based CRM space and has expanded into data analytics and AI through acquisitions. The stock has experienced a setback due to overvaluation concerns, creating an opportunity for long-term investors.

Why CRM Stocks Are a Top Pick

Salesforce is a leading cloud-based software company that specializes in customer relationship management (CRM) tools that help businesses manage sales, service, marketing and more. Its platform enables companies to streamline operations, increase customer engagement and drive growth.

Salesforce’s growth story remains compelling, with expected revenue growth of 17% by 2025 and strong demand for AI-powered products. Its current valuation of 42x P/E, while high, is justified given its robust free cash flow and competitive moat. As the digital transformation trend continues, Salesforce is well positioned to capitalize.

4. Walgreens Boots Alliance (WBA)

Business overview

Walgreens Boots Alliance operates a retail pharmacy and healthcare network that provides prescription medications, over-the-counter products and wellness solutions. The company is a key player in improving access to healthcare worldwide.

Walgreens, a global pharmacy and retail company, has been facing declining retail revenue. However, its focus on healthcare and cost-cutting measures is starting to pay off.

Why WBA shares are a top choice

Walgreens offers an attractive value proposition with an 8% yield and a P/E of just 3.3. The company is shifting its strategy toward becoming a healthcare provider with investments in primary care clinics and telehealth partnerships. These measures should help stabilize earnings and drive long-term growth.

5. American Tower Corporation (AMT)

Business overview

American Tower owns and operates a global portfolio of wireless and broadcast communications infrastructure, including cell towers and data centers. The company provides essential connectivity solutions to support the growing demand for mobile data and digital communications.

American Tower is a leading real estate investment trust (REIT) that owns and operates wireless communications towers. As demand for 5G infrastructure grows, AMT will reap significant benefits.

Why AMT shares are a top pick

American Tower combines the fixed income of a REIT with growth potential linked to the expansion of 5G networks. Its 3.4% yield, supported by consistent AFFO (adjusted funds from operations) growth, makes it a compelling choice for income-focused investors seeking exposure to technology-driven infrastructure.

Bottom line

February 2025 is an excellent opportunity for investors to consider undervalued stocks across various sectors. From Intel’s comeback in semiconductors to Walgreens’ transformation into a healthcare provider, these picks offer a mix of growth and income potential. Diversifying across these sectors and focusing on valuation metrics can help investors take advantage of these opportunities while managing risk.

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