Analytics (1) 14.07.26

With the first half of 2026 complete, we reviewed how stocks have performed amid recent market turbulence. The aim was to find solid companies that have fallen year to date but still offer strong upside and positive analyst sentiment. The basket includes three US companies from Healthcare, Technology and Financials that we see as undervalued, financially strong and worth considering for a portfolio. The criteria were a negative YTD return, a share price below or close to the 200-day Simple Moving Average, and more than 50% analyst buy recommendations.

Abbott Laboratories [Internal score 71/100] is one of the world’s oldest, largest and most diversified healthcare companies. Its four main segments are Medical Devices, Diagnostics, Nutrition and Pharmaceuticals. ABT has a market capitalisation above $160B. Its FreeStyle Libre glucose monitoring systems generate billions of dollars in annual sales, while Abbott also remains a leader in heart disease treatment. Abbott delivered a solid last quarter. Revenue exceeded $11.1B, up 7.8% y/y. Net income for the 1st quarter of 2026 reached $1.6B, $176m above the same period in 2025. The company has generated positive FCF for more than 10 years. FCF was $916m in the latest quarter and above $7.4B in 2025.

Microsoft Corporation [Internal score 76/100] is a global technology leader and the world’s second-largest company by market capitalisation, at around $2.9 trillion. Its business has three main segments: IIntelligent Cloud (Azure), Productivity and Business Processes (Microsoft 365) and Personal Computing (Windows OS, Xbox etc).  Microsoft owns a major stake in OpenAI and has exclusive rights to commercialise its models. The annual run rate of Microsoft’s pure AI business has already exceeded $37 billion, up 123% from last year. Previous quarter results were robust. Revenue increased 18.3% y/y to more than $82.8 billion. Net income reached $31.8 billion, up 15% y/y, while quarterly FCF exceeded $15B.

Wells Fargo [Internal score 70/100] ranks fifth among US banks by market capitalisation, at $266 billion. In the 1st quarter of 2026, ROE was 11.6%, (versus the industry average of 11.1%) – the highest among selected peer banks (Citi and BofA).  The average loan interest rate in the 1st quarter of 2026 was 5.6% per annum. The average deposit rate for the same period was 1.9% per annum.  From January to March, the bank’s net interest income grew by 5% y/y and reached $12.1 billion, while net profit increased by 10% y/y to $5.3 billion. It has a highly positive sensitivity to interest rate increases. If the US monetary policy remains tight and rates increase by 50 bps, we expect ROE to increase to 12.1%, and NIM to 2.43%. P/E (13.4x) is significantly below the market average (14.9x). As rates rise, interest income has greater potential for growth than its peers.

The next few weeks bring clear catalysts. Wells Fargo reports Q2 results on 14 July, followed by Abbott on 16 July, while Microsoft enters its earnings window later in the month. Strong results and guidance could shift attention from weak YTD share prices back to earnings growth and support a re-rating. The Fed meeting on 28–29 July is another catalyst. Higher-for-longer rates would support Wells Fargo’s interest income, while a softer signal could lower bond yields and improve valuations for Microsoft and Abbott. This gives the basket several routes to recover from current depressed levels.