For Immediate Release
Chicago, IL – April 30, 2026 – Stocks in this week’s article are First American FAF, Marathon Petroleum MPC and Churchill Downs CHDN.
3 Undervalued PEG Stocks with Double-Digit Growth to Buy Now
Investment in 2026 has become increasingly sensitive to macro conditions. While large-cap technology stocks, particularly those tied to artificial intelligence, continue to show index-level performance, returns have been less broad-based than in prior years. Elevated interest rates and tighter financial conditions have raised the bar for growth equities, making valuations more dependent on execution and near-term earnings visibility rather than distant growth expectations.
This shift is beginning to reshape the market scenario. With discount rates remaining high, the relative demand for long-duration growth assets has weakened, prompting a gradual reallocation toward value-oriented segments of the market. Companies with lower valuation multiples and more predictable cash flows, often found in financials, industrials and select healthcare names, are increasingly favored as investors prioritize earnings durability over long-term optionality.
Here, we discuss three such stocks - First American, Marathon Petroleum and Churchill Downs — whose valuations remain compelling relative to earnings and fundamentals, positioning them to potentially benefit from a sustained rotation toward value in 2026.
However, this apparently simple value investment technique has some drawbacks and not understanding the strategy properly may often lead to "value traps." In such a situation, these value picks start to underperform over the long run as the temporary problems, which once drove the share price down, turn out to be persistent.
There are many value investment yardsticks, such as dividend yield, P/E or P/B, which are simple and can single out whether a stock is trading at a discount.
However, for investors looking to escape such value traps, it is also vital to determine where the stock would be headed in the next 12 to 24 months. Warren Buffett advises these investors to focus on the earnings growth potential of a stock. This is where lies the importance of a not-so-popular value investing metric, the PEG ratio.
PEG Ratio at a Glance
The PEG ratio is defined as (Price/ Earnings)/Earnings Growth Rate
A low PEG ratio is always better for value investors.
While P/E alone fails to identify a true value stock, PEG helps find the intrinsic value of a stock.
There are some drawbacks to using the PEG ratio. It doesn't consider the common situation of changing growth rates, such as the forecast of the first three years at a very high growth rate, followed by a sustainable but lower growth rate over the long term.
Hence, PEG-based investing can turn out to be even more rewarding if some other relevant parameters are also taken into consideration.
Our PEG-Driven Picks
Here are three stocks that qualified the screening:
First American: Headquartered in Santa Ana, CA, First American provides title insurance, settlement services, property data, home warranties and banking solutions. Serving real estate and mortgage participants, its integrated platform, including First American Trust, improves transaction efficiency, risk management and data access across residential and commercial property markets.
FAF currently has a Zacks Rank #1 and a Value Score of A. It also has an impressive five-year expected growth rate of 15.2%.
Marathon Petroleum: Findlay, OH-based Marathon Petroleum is a leading independent refiner, transporter and marketer of petroleum products. Marathon Oil completed the acquisition of its rival Andeavor in a $23.3 billion deal, thereby becoming the nation's largest refining company by market capitalization. The deal also made the company the largest U.S. refiner and the fifth largest in the world by capacity.
MPC currently has a Zacks Rank #1 and a Value Score of A. It also has an impressive five-year historical growth rate of 50.4%.
Churchill Downs: Churchill Downs operates horse racing venues, online wagering platforms and regional casinos in the United States. Its segments include Live and Historical Racing, Wagering Services (via TwinSpires) and Gaming, offering pari-mutuel betting, racing data, streaming services and technology solutions.
CHDN currently has a Zacks Rank #2 and a Value Score of B. It also has an impressive five-year historical growth rate of 24.5%.
You can see the complete list of today's Zacks #1 Rank stocks here.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2911206/3-undervalued-peg-stocks-with-double-digit-growth-to-buy-now
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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First American Financial Corporation (FAF): Free Stock Analysis Report
Marathon Petroleum Corporation (MPC): Free Stock Analysis Report
Churchill Downs, Incorporated (CHDN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).