This week’s lead is a specialty chemicals name where the Hormuz supply chain chaos created a Q1 earnings miss and a gap to cash flow fair value wide enough to drive a truck through, with Q2 earnings on August 5 as the first real checkpoint on management’s recovery guidance.

You can get ahead of that print and two more confirmed undervalued setups by reading on right now.

Healthcare

Biogen Inc. (NASDAQ: BIIB) trades around $203 after Truist upgraded the stock to Buy and raised its target to $235 from $190. The move lands right before Biogen presents detailed Phase 2 data for diranersen, its experimental tau-targeting Alzheimer’s drug, at the Alzheimer’s Association International Conference in London.

This is not a clean victory lap. Diranersen previously missed the Phase 2 primary endpoint, and Biogen’s Alzheimer’s history gives the market every reason to stay skeptical. The stock only works from here if the full data makes the miss look less damaging than investors feared.

The valuation gap is modest, but the setup has real tension. Biogen sits about 14% below the new target, with a PE near 22x, and the pipeline now has to earn the confidence the upgrade is trying to price in. You do not need a flawless Alzheimer’s story here. You need enough detail to earn a second look.

Truist Is Stepping In Before the Evidence Is Fully Public

The upgrade matters because it comes before investors see the detailed data. That makes the catalyst less about what Biogen already proved and more about whether the conference presentation can shift the risk-reward debate.

The Trial Miss Still Keeps This From Feeling Easy

A failed primary endpoint is not a footnote. Biogen can talk about tau reduction, cognitive signals, and Phase 3 plans, but the market will need clean evidence before rewarding another Alzheimer’s bet.

Specialty Chemicals

Axalta Coating Systems Ltd. (NYSE: AXTA) trades around $32.55 after fresh pressure hit the merger path with AkzoNobel. Nippon Paint has offered €7.5 billion for Akzo’s decorative-paints unit, a move that puts more attention on why Akzo still wants the Axalta combination.

That matters because the Axalta deal is built around scale, coatings focus, and roughly $600 million in expected cost synergies. The combined company would have about $17 billion in annual revenue, giving investors a cleaner way to value the platform than Axalta standing alone.

AXTA trades around 19x earnings, and the target gap is modest. The sharper point is strategic value. When a rival bidder starts testing pieces of Akzo, you get a clearer reminder that coatings assets still have buyers, scarcity, and pricing power.

Nippon’s Bid Puts Strategic Value Back in the Frame

Akzo rejected the latest approach and says it remains committed to the Axalta merger. That keeps the focus on whether shareholders see more value in the larger coatings platform than in breaking the business apart.

Synergies Matter More Than the Target Gap Here

Axalta does not need a dramatic valuation discount to make this interesting. The $600 million synergy number is the engine, and the fresh outside interest around Akzo makes that merger math harder for the market to ignore.

Building Technology

Resideo Technologies Inc. (NYSE: REZI) trades around $35 after outlining a new investor day framework for life after the planned ADI Global Distribution spin-off. The company wants the market to stop valuing it as a mixed hardware-and-distribution business and start viewing it as a cleaner building-technology name.

The targets give that reset some shape. Resideo is aiming for 4% to 5% annual revenue growth from 2025 through 2030, about 400 basis points of gross margin expansion, and adjusted EBITDA margins of 23% to 25% by the end of the period.

The valuation gap is still wide enough to matter. REZI has a $49 consensus target, implying the stock is roughly 29% below that mark. What you are buying here is not a finished spin-off story. It is the chance that a cleaner structure and higher margin profile finally make the business easier to price.

The ADI Spin-Off Is the Real Value Test

Investor-day targets only matter if the separation works. Resideo has to prove the post-spin company can stand on its own with better margins, less complexity, and a clearer identity.

400 Basis Points Is the Margin Number to Watch

The revenue target is steady, not explosive. The real re-rating lever is margin expansion, because a building-technology company with a 23%-25% adjusted EBITDA margin profile should not be valued as a confused hybrid business forever.

Centene (NYSE: CNC) just had its best quarter in years, and the stock still trades at a forward PE that is roughly 40% below the industry average, which is the kind of setup you do not usually get to sit with for very long. 

Q1 adjusted EPS of $3.37 beat internal expectations by a wide margin; the company raised full-year 2026 guidance, and total premium revenues grew 5% year over year to $44.7 billion. The Medicaid HBR came in at 87.3% with effective cost management doing the work and Medicare segments outperforming across both MA and PDP lines. 

Q2 prints in late July, and that is where you find out if the managed care recovery is durable across the sector or just Centene-specific. The risk is that Marketplace members' losses from expiring ACA subsidies create a revenue headwind that the managed care wins cannot fully offset.

Goodyear Tire (NASDAQ: GT) makes products that get bought whether or not the economy is cooperating, which is more than most value names in this market can say. The CEO has been running a multi-year restructuring that cuts debt, closes underperforming operations, and refocuses capital on the consumer tire segments with the highest margins, and the next earnings print is the checkpoint on whether that discipline is translating into numbers. 

Any improvement in consumer tire pricing or softening in raw material costs shows up immediately in the margin line because of how the operating leverage works in this business. This is a name where the restructuring is happening in real time, and the next few quarters will tell you whether it is working. 

The risk is that natural rubber and energy input costs spike faster than pricing adjustments can catch up.

Western Union (NYSE: WU) runs one of the largest money transfer networks on the planet, and the stock trades at a fraction of what comparable financial services platforms command, with a dividend yield doing real work while you wait for the digital transformation to get more credit from the market.

 The business is actively shifting from physical agent locations toward digital and mobile transfers, which carry better economics and reach a younger demographic that does not walk into a store. Q2 earnings in late July give you an updated read on how fast the digital mix is actually expanding and whether management’s commentary on pricing power is holding up against fintech competition. 

This is a patience trade with income attached, not a momentum story. The risk is that Wise, Remitly, and other digital-first competitors keep taking pricing share faster than WU’s volume growth can compensate.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any [blank] stocks you want me to check out.

Best Regards,
—Noah Zelvis
Undervalued Edge