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15 Top ESG Stocks That Look Undervalued for 2020

Booking: 7.8% Implied Upside

Booking Holdings Inc. (NASDAQ: BKNG) had more implied upside than rival Expedia, but that is also after its rival saw a large post-earnings gain. Booking shares recently traded at $1,971.50, and the $2,124.64 consensus target price left an implied upside of about 7.8%. There is no dividend here, but the $82.5 billion market cap is impressive, considering its recent high of almost $2,100 that was resistance last September and this January. Analysts issuing recent upside targets were SunTrust Robinson Humphrey at $2,350 and UBS at $2,200.

Bristol-Myers Squibb: 14.6% Implied Upside

Bristol-Myers Squibb Co. (NYSE: BMY) was last seen at $65.60 per share, and its consensus target price of $73.40 leaves an implied upside of 11.9%, before factoring in its 2.7% dividend yield. That target is above its 52-week high of $68.34. Bristol-Myers was raised to Buy from Hold at Argus late in 2019, and the firm launched an $80 target price at that time.

Coca-Cola: 9.1% Implied Upside

Coca-Cola Co. (NYSE: KO) has moved well beyond the namesake Coca-Cola sugar-water beverages into water, sports drinks and other beverages. Compared with a share price of $59.60, the $63.50 consensus target price gives implied upside of 6.5%, before factoring in the 2.6% dividend yield. This stock could not get above $50 until last year, but it has been on a breakout move since that time, and it is often considered a defensive stock as it rises on many days the stock market is lower.

Morgan Stanley raised its target on Coca-Cola to $65 from $61, Merrill Lynch raised its price objective to $65 from $60, and RBC lifted its target to $66 from $60, all at the end of January.

Johnson & Johnson: 11.3% Implied Upside

Johnson & Johnson (NYSE: JNJ) has an all-time high of $154.50, but its shares are still down to $148.65. The consensus target price of $161.81 at this time implies upside of more than 8.8%, and that’s before including its 2.5% dividend yield for a total return calculation. The company is still fighting its asbestos/talc cases and has some small opioid exposure as well, so it remains to be seen how the ESG scoring will be in the coming years. Credit Suisse raised its target to $170 from $163 in late January, and Barclays went all the way up to $173 from $140 before the end of 2019.

Lowe’s: 9.7% Implied Upside

Lowe’s Companies Inc. (NYSE: LOW) is still treated as second fiddle behind larger rival Home Depot, but it has many of the same ESG qualifications. Its $133.81 consensus target price and $124.00 share price leave more implied upside of 7.9%, while Home Depot’s shares were about 3% above their consensus target. Lowe’s also comes with a 1.8% dividend yield. Wells Fargo raised its Lowe’s target to $140 from $135 in February, and Morgan Stanley raised its target to $140 from $130 in late January.

3M: 11% Implied Upside

3M Co. (NYSE: MMM) seems like it’s resting on the laurels of over 50 years of dividend hikes while the stock languishes after multiple poor earnings reports. With shares now down to $159.25, the consensus target price of $171.25 leaves an implied 7.5% upside, before factoring in its 3.6% dividend yield. 3M is down from a 52-week high of $219.75, and this was briefly a $250 stock at the start of 2018.

3M has taken two charges in excess of $200 million tied to its environmental exposure over a chemicals issue. Analysts have lowered expectations as the company’s turnaround time has been extended far longer than expected and with continued mystery surprises, but that may be the long-term opportunity knocking if the company gets its act together again.

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