3 Beaten-Down Stocks That Haven't Been This Cheap in Over 5 Years

Core Insights - The article discusses three major stocks that have significantly declined this year, highlighting their current challenges and potential for recovery. Group 1: Lululemon Athletica - Lululemon's stock has dropped 58% this year, reaching levels not seen since March 2020, with a current P/E multiple of 11, indicating a potentially cheap valuation [4][6] - The company faces concerns over tariffs and a slowdown in discretionary spending, which could impact sales despite its strong brand appeal among younger consumers [3][4] - Comparable sales growth was only 1% in the most recent quarter, and recovery may depend on economic conditions, with expectations for a turnaround taking at least one to two years [6] Group 2: Target - Target's stock has decreased by 33% this year, with net sales of $25.2 billion down approximately 1% in its last earnings report [7][8] - The company is undergoing significant restructuring, including 1,800 corporate layoffs, under new CEO Michael Fiddelke, who aims to improve profitability [8][10] - Target's stock trades at 10 times earnings, suggesting a margin of safety, and there is potential for recovery within one to two years [10] Group 3: Kimberly-Clark - Kimberly-Clark's shares have fallen over 20% this year, reaching their lowest price since 2018, primarily due to its planned acquisition of Kenvue for $48.7 billion [11][12] - The acquisition poses challenges, including taking on liabilities related to talc-based products and other controversies surrounding Kenvue's brands [12] - Trading at 17 times trailing earnings, Kimberly-Clark is considered the most expensive among the three stocks discussed, with a challenging path to recovery [13]