Let’s talk for a moment about growth versus value. In the stock markets, this marks the basic split in investing strategies; growth stocks are those predicted to outperform the markets, while value stocks are those seen as underpriced with relatively high upside. The two categories can overlap substantially – after all, no investor gets into a stock if he doesn’t think it will grow in value – but they do highlight a difference in approaches to the market. Value investors are generally looking at a multi-year timeline of share appreciation, while growth investors typically expect a faster, higher rate of return.

These different outlooks sometimes go along with different economic conditions. A growth stock approach works best in a low-interest, low-inflation environment – which we’ve enjoyed for the better part of a decade. But the economy is shifting now. Inflation is rising, the 10-year Treasury bond yield has risen above 1.7%, and the Federal Reserve is expected to start hiking rates sooner rather than later. In short, we’re about to see turn towards higher inflation and higher interest – the conditions that tend to benefit value stocks.

We can get a jump on this change, and look into the value stocks. The Wall Street analysts are starting to pinpoint strong value plays that investors should follow, and we can use the TipRanks data to pull up the details on their picks. So here are two value stocks that the analysts say are Buy propositions.

Vontier (VNT)

The first value stock we're looking at is Vontier, a tech company focused on mobility. That is, Vontier’s brands offer technological solutions to the problems of the modern transport industry. From car washes to traffic support to high-end equipment to automotive fleet management to engine maintenance and diagnostic tools, Vontier is working to smooth out the speedbumps as the world shifts gear from fossil-fuel burning combustion engine vehicles to cleaner, more efficient, renewable-fuel cars.

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Vontier was established in October 2020, separating from Fortive Corporation. It now boasts over 150 locations globally, and saw revenue of $2.7 billion in 2020. The company has already recorded $2.2 billion in revenue for 2021. Looking ahead, the company expects its Q4 earnings to come in in-line with the Q3 results, in the range of 77 cents to 81 cents.

In the meantime, VNT stock is down ~20% from the peak it reached in early September of last year. The fall in stock price comes while the company finished digesting its mid-September acquisition of DRB Systems, a software company that provides solutions to the car wash industry for point-of-sale and workflow. Vontier predicts that this acquisition will add 4 to 5 cents to the 2021 earnings, and generate some $170 million in revenue for last quarter.

Covering Vontier for Evercore ISI, analyst David Raso describes the stock as one of our favorite value-plays. Backing that, he writes: "VNT stock was inexpensive absolute/relative when spun out of Fortive ~15 months ago. Since then, ‘21 consensus EPS estimate for VNT has gone from $2.42 to now $2.85 (+18%), ‘22 from ~$2.50 to now $3.01… VNT’s discounts to peers not only remain extreme (our SOTP for VNT comfortably supports a $50+ stk) but have widened since the spin."

In light of these comments, Raso rates Vontier an Outperform (i.e. Buy), and his $42 price target implies an upside of ~40% for the year ahead. (To watch Raso’s track record, click here)

Overall, there are 3 analyst reviews on record for this stock, and they all agree – it’s one to Buy, making the Strong Buy consensus unanimous. Shares are priced at $30 and their $43.33 average target indicates a one-year upside of ~44%. (See VNT stock forecast on TipRanks)

Polaris (PII)

The next stock on our list is a well-known name in winter sports and recreation equipment. Polaris is probably best-known for its snowmobiles, but also manufactures and markets motorcycles, ATVs, and, more recently, neighborhood electric vehicles. The company has the advantages of an established name and a loyal customer base – including valuable vehicle contracts with the US Department of Defense.

The last two years have been volatile for Polaris. That’s to be expected, as this is an original equipment manufacturer building products for the discretionary spending/leisure market. It’s been exposed to serious headwinds – the pandemic shutdowns in 2020, the supply chain and labor disruptions in 2021 – that have made it hard to gain traction even as consumers have started spending more and even as outdoor activities have taken on a premium.

A look at the revenues and stock price will help tell the story. In the first 9 months of 2020, Polaris saw $4.87 billion in total sales, which grew to $6.03 billion in the first 9 months of 2021. In Q3, however, earnings fell 30% year-over-year, from $2.85 per share to $1.98. The shares, which peaked above $140 in April last year, are down 21% since then.

Polaris now trades at levels "too cheap to ignore," according to Morgan Stanley's Billy Kovanis. The analyst analyzes Polaris’ current situation and outlook, and sees plenty of opportunity for investors.

“We see earnings growth of 7% in 2022 and FCF of ~ $650mm which represents a very favorable ~10% FCF yield. Further, 2022 earnings estimates have continued to get cut over the last 6 months, which de-risks earnings estimates in 2022. Additionally, the market has continued to haircut the multiple of Polaris which is another positive as it removes the potential overhang risk of multiple compression going forward…. We like the set-up here,” Kovanis opined.

In line with his optimistic approach, Kovanis gives Polaris shares an Overweight (i.e. Buy) rating and his $150 price target suggests ~32% potential upside for the coming year. (To watch Kovanis’ track record, click here.)

Overall, the Strong Buy consensus here is based on 10 reviews, which include 8 Buys against just 2 Holds. The $148.6 average target is practically the same as Kovanis' objective. (See Polaris stock forecast on TipRanks)

To find good ideas for value stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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