These 8 stocks are cheap and are expected to see strong earnings growth this year

Published Wed, Feb 22 202310:31 AM ESTUpdated Wed, Feb 22 202312:04 PM EST

Jesse Pound @/in/jesse-pound @jesserpound

Some Wall Street strategists are worrying that stocks are getting too expensive again as earnings weaken, but there are some notable companies in the S & P 500 that appear to avoid both of those issues. Morgan Stanley strategist Mike Wilson warned in a note over the weekend that the stock market has risen "into thin air," trading at a level that future earnings can't support. But there are some stocks that appear more reasonably priced, at least by one common valuation yardstick. The stocks on the list below have forward price-to-earnings ratios below 10, according to FactSet, meaning they are trading well below the average for the S & P 500. Additionally, the stocks are well liked by analysts, with buy ratings from at least 55% of analysts and upside to the average price target of 10% or more. The companies listed are also expected to see earnings per share growth of at least 10% this year. The stock on the list that is the cheapest by this valuation metric is Diamondback Energy , with a P/E ratio of just 5.6. The stock is down nearly 20% from its recent high in November, but analysts still expect Diamondback's earnings per share to more than double this year. Wells Fargo analyst Roger Read initiated coverage of Diamondback in January with an overweight rating, praising the company's cash returns in the form of dividends and stock buybacks. "It is clear to us FANG possesses a favorable capital structure. Following a series of recent re-financings and new debt issuance to fund the Permian acquisitions, FANG faces no significant principal payments until 2026. This implies the 75% [free cash flow] payout ratio can be sustained for the next several years," Read said in a note to clients. The stock on the list with the highest approval rating is Delta Air Lines . According to FactSet, 81% of Wall Street analysts have a buy rating on the stock. Delta is coming off a solid fourth quarter, though it did warn about cost pressures this year. Redburn analyst James Goodall upgraded the airline to buy in a Feb. 8 note, citing Delta's competitive advantage on certain routes as one reason to be bullish. "In analyzing the U.S. airlines domestic networks from a competitive standpoint, we find Delta is best placed," the note said. Another airline on the list is the smaller Alaska Air , which has buy ratings from 80% of analysts. There are also several financial firms on the list, with Wells Fargo being the most notable. Financial stocks often trade at lower P/E ratios than the market as a whole, due in part to their slower growth prospects, but insurance company MetLife offers some attractive upside, according to analysts. According to FactSet, 65% of analysts have a buy rating on MetLife, with an average upside of 17% from current levels. — CNBC's Michael Bloom contributed to this report.