Wall Street analysts are pounding the table for these unappreciated stocks

Published Sat, Jun 12 20218:50 AM EDT

There are some stocks that are just not getting enough attention from investors, according to Wall Street analysts. As the pandemic moves closer to the finish line, analysts say these companies have tremendous earnings and revenue potential. CNBC Pro combed through the most recent Wall Street research to find some of the most undervalued and overlooked stocks to own. They include: Charles Schwab , AutoZone , American Express , Aramark and Biogen. AutoZone Shares of the retail auto parts company are down almost 7% over the last month but Atlantic Equities analyst Sam Hudson said in a recent note that investors should stick with the stock. The company is coming off of a stronger than expected third quarter earnings in late May bolstering Hudson's thesis that the stock is a long term winner. Recent checks by Hudson show that AutoZone Pro, the company's mobile ordering service, is firing on all cylinders and could send shares higher. "With AZO's Pro sales up +35% from the 2019 level, we believe the company has taken significant share through the pandemic," he wrote. Hudson went on to say that the success of the app is likely to lead to "double-digit Pro sales growth over the next five-years, adding > 250bps to comps and underpinning double-digit EPS growth." In addition, the stock is relatively inexpensive compared to peers, the firm added. "This robust outlook and AZO's position as a structural, long-term Covid-19 winner is significantly underappreciated at the current < 16x P/E multiple," he said. Hudson also predicted strong buyback activitity in the company's future. "We therefore view the recent stock pullback as a compelling buying opportunity and reiterate our Overweight rating," Hudson said. American Express Conviction is growing in the financial payment and credit card company, according to Wolfe Research analyst Bill Carache. The firm said it's been "quietly" bullish on the stock for a while even as affluent customers ceased spending during the pandemic, but now Carache is ready to speak out. "That has now changed, and our analysis of recent data points increases our conviction that shares are poised to inflect higher," he said. Carache acknowledged that business travel may still be slow to return but all signs indicate a quick leisure rebound which benefits American Express. "After pulling back on its proactive marketing efforts at the beginning of the pandemic, AXP is once again stepping up its game with more attractive welcome offers," the firm said. Investors should have confidence that the inflection in travel and entertainment spending is nearing due to the fast recovery and increased consumer spend, Carache added. "Consensus is underestimating [the] resurgence in AXP discount revenues," he wrote. Carache also raised his price target on the stock to a Street high of $197 per share and said investors should take advantage of what he called a "table-pounding" buying opportunity. Shares are up 2.7% this month. Aramark Shares of the food service and concessionaire company have underperformed and are down around 1.3% this year, but in a note this week, Bank of America analyst Gary Bisbee mapped out his thesis of why Aramark is a stock to own now and in the future. ""We are increasingly positive on ARMK, which we see as an underappreciated re-opening idea and compelling post-pandemic story," he wrote. The company was well positioned before the pandemic and Bisbee believes the company will pick right up where it left off. The reopening of stadiums and other venues reopening should help as well, he added. ""Prior to the pandemic, the Aramark story was improving with new leadership and an activist on the board," Bisbee said. Aramark also has an underappreciated uniforms that Bisbee said was a "source of value" for the company. "We like the focus on accelerating organic revenue growth, and see the strategies being implemented as credible," he said. The stock's valuation is also attractive and Bisbee sees a very compelling entry point. "All in, we like the risk-reward here and believe that ARMK is likely to see performance strengthen before year-end," the firm wrote. Charles Schwab- Wells Fargo, Overweight rating "SCHW stock has been a significant outperformer rising by 41% YTD. Yet we remain optimistic on the prospects for ongoing outperformance as the company has distinct catalysts that we think are underappreciated. This includes the potential for a higher net interest margin as mortgage loan prepayment activity slows, and synergies tied to the acquisition of TD Ameritrade. As before, there is also considerable upside potential associated with higher short-term interest rates although this catalyst is staying out of our forecast for now." AutoZone- Atlantic Equities, Overweight rating With AZO's Pro sales up +35% from the 2019 level, we believe the company has taken significant share through the pandemic. Importantly, these share gains should set a strong platform for double-digit Pro sales growth over the next five-years, adding > 250bps to comps and underpinning double-digit EPS growth. This robust outlook and AZO's position as a structural, long-term Covid-19 winner is significantly underappreciated at the current < 16x P/E multiple. We therefore view the recent stock pullback as a compelling buying opportunity and reiterate our Overweight rating." American Express- Wolfe, Outperform rating "A Table-Pounding Buy. ... .While we've been bullish on AXP off its March 2020 lows, we've been relatively quiet in our support for the stock over the past year given its heavy gearing to T & E and affluent consumers who have had their discretionary spending capacity capped during lockdowns. That has now changed, and our analysis of recent data points increases our conviction that shares are poised to inflect higher. Consensus is underestimating resurgence in AXP discount revenues." Aramark- Bank of America, Buy rating "We are increasingly positive on ARMK, which we see as an under-appreciated re-opening idea & compelling post-pandemic story. ... .Valuation looks attractive at a 15% discount to the market. All in, we like the risk-reward here & believe that ARMK is likely to see performance strengthen before year-end. ... .Prior to the pandemic, the Aramark story was improving with new leadership and an activist on the board. We like the focus on accelerating organic revenue growth, & see the strategies being implemented as credible. We also believe the Uniforms business is a potential source of value." Biogen- UBS, Buy rating "FDA's approval of Aduhelm is transformative to BIIB's growth profile, putting it at the top of its large cap biopharma peers. With unfettered access to the Alzheimer's disease market, we expect Aduhelm to be met with high demand given its status as the first approved disease-modifying therapy. While we expect continued public scrutiny around the approval and pricing which could create some volatility, we believe the market is underappreciating the launch & ultimate earnings potential of this asset which is the central tenet of our buy thesis."

An employee, right, helps a customer change a license plate bulb outside an AutoZone store in Princeton, Illinois.

Daniel Acker | Bloomberg | Getty Images

There are some stocks that are just not getting enough attention from investors, according to Wall Street analysts.

As the pandemic moves closer to the finish line, analysts say these companies have tremendous earnings and revenue potential.

CNBC Pro combed through the most recent Wall Street research to find some of the most undervalued and overlooked stocks to own.