These stocks are now cheap and loved by Wall Street after falling more than 20%

Published Tue, Jan 25 202210:59 AM ESTUpdated Tue, Jan 25 20224:05 PM EST

Jesse Pound @/in/jesse-pound @jesserpound

The market has been hit by a broad sell-off to start 2022. As a result, several stocks are now trading at sharp discounts relative to their historical valuations and could be primed for big returns going forward. Even with Monday's dramatic comeback , the S & P 500 is on track for the worst month since March 2020 and is about 10% below its record closing high reached on Jan. 3. Many individual stocks have seen even bigger drawdowns. However, some of those stocks may present good buying opportunities at current levels. The names below are 20% or more below their 52-week highs. They are also at least 10% below their average forward price-to-earnings ratio over the past five years. Of the analysts covering these companies, at least 60% have buy ratings on them and average price targets that show upside of 20% or more, according to FactSet. The list includes stocks from a variety of industries, including two airlines. Both Alaska Air Group and Delta Air Lines are well liked, with buy ratings from 93% and 71% of analysts, respectively. Investment firm Berenberg upgraded Delta to buy from hold on Monday night , saying that the company was close to reclaiming its prepandemic margins and pointing to its credit card deal with American Express as a positive. Alaska Air is trading at a forward P/E of 11.5 per share, well below its average forward multiple of 28.3. Delta, which has traded at an average multiple of 31.9 in the last five years, is now trading at just 17. The list also includes a few health care names in Bio-Rad Laboratories and insurance giant Humana . Health stocks are often viewed as defensive plays, so they may prove to be winners if market volatility continues. Bio-Rad is trading at a forward P/E of 44.1, about 10% below its average multiple. Humana's 15.7 forward P/E is about 15% below its five-year average. Meanwhile, the stock on the list with the biggest drawdown from its recent high and the biggest gap to its average price target is Enphase Energy . The solar stock has tumbled more than 50% since its peak in mid-November.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, January 18, 2022.

Brendan McDermid | Reuters