From Morningstar:

After years of lagging behind growth stocks, strategists say 2024 could be the year of value stocks. In 2023, value stocks returned 12%, compared to 38.5% for growth stocks. Due to disappointing growth stock returns so far in 2024, experts believe the tables may be turning, especially with a boost from artificially low interest rates. There may be opportunities for investors in the value stock segment, which is currently undervalued. Currently the best opportunity for investors, value stocks stand out with their cheap valuations when compared to estimates of their fair market prices. This may be particularly true for small cap value stocks, which are trading at a discount of 16% relative to their fair value. Large cap value stocks are also close to their fair values, while large cap growth stocks are carrying a 15% premium. With the possibility of more interest rate cuts on the horizon, value stocks could see continued growth. However, not all analysts are convinced that the economic environment in 2024 will support value outperformance. Growth stocks tend to fare better with lower interest rates and modest inflation, conditions that may prevail in the near future. While a period of slower growth could benefit more defensive value stocks, a major rally within the value universe would depend on the participation of financial stocks. Overall, some experts remain optimistic about the comeback of value stocks.



Read more: Will Value Stocks Take The Lead in 2024?