Evercore ISI Flags Stocks Cheaper Than 2020

Lead paragraph

Evercore ISI published a list on Mar 24, 2026 identifying a set of US equities that remain priced below their March 23, 2020 pandemic lows, even after a multi-year macro recovery (source: CNBC, Mar 24, 2026). That observation is notable because the S&P 500 experienced a 34% peak-to-trough drawdown between February and March 2020 and reached a closing low of 2,237.40 on March 23, 2020 (S&P Dow Jones Indices). Many investors have assumed that broad market indices fully reflected the post-pandemic recovery; Evercore’s list highlights a persistence of idiosyncratic weakness in a tranche of names. The publication coincided with improving geopolitical risk sentiment tied to de-escalation signals in the Middle East in late March 2026, which temporarily relieved a spike in risk premia (CNBC, Mar 24, 2026). This piece evaluates the macro and micro drivers behind why some stocks have not recovered to 2020 levels, quantifies the scale of divergence, and outlines implications for sector allocation and risk management. This is a factual, neutral briefing for institutional readers — it does not constitute investment advice.

Context

The macro backdrop since March 2020 has been atypical: after the initial pandemic drawdown, global fiscal and monetary stimulus, supply-chain normalization, and corporate earnings recovery drove broad equity indices to multi-year highs. The S&P 500 rebounded strongly from the March 23, 2020 low of 2,237.40 to record levels in subsequent years, reflecting a combination of earnings recovery and valuation expansion (S&P Dow Jones Indices). Despite that, market breadth has been uneven — a relatively concentrated rally in a subset of mega-cap and technology names contrasted with prolonged underperformance across several cyclicals and niche industries. Evercore ISI’s list, published March 24, 2026, highlights this divergence empirically by cataloguing names that have failed to reclaim their March 2020 price points (CNBC, Mar 24, 2026).

An important structural factor has been sector rotation and differential earnings momentum. While technology and consumer discretionary megacaps benefited from persistent secular trends, areas such as travel-related services, small-cap industrials, and certain financials experienced idiosyncratic shocks and capacity adjustments that curtailed their price recovery. Additionally, higher-for-longer interest rate expectations during 2022–2024 compressed valuations for interest-rate-sensitive and low-growth businesses, creating a valuation gap that has proven persistent for some issuers. Geopolitical shocks — notably the 2026 Middle East tensions that briefly spiked risk premia in March 2026 — added an overlay of event risk that disproportionately penalized firms with exposure to trade routes or regional operations (CNBC, Mar 24, 2026).

From a liquidity and ownership perspective, the post-pandemic era saw shifts in investor composition. Passive flows concentrated capital into index leaders, while active managers and specialty holders retained positions in beaten-down names, creating pockets of illiquidity. The result is a market structure where headline indices can mask large absolute price declines in non-index-dominant stocks. For institutional investors, these dynamics underscore why headline index performance is an incomplete indicator of opportunity or risk.

Data Deep Dive

Evercore ISI’s publication date of March 24, 2026 is a useful anchor: it allows us to compare price trajectories over a six-year window from the March 23, 2020 low. Historically, the S&P 500’s 34% peak-to-trough decline in March 2020 is a fixed reference point (S&P Dow Jones Indices). Many of the names Evercore highlighted remain below that March 23, 2020 closing price, a non-trivial outcome given the broad market’s recovery. That fact alone implies a two-tier recovery where index leaders have accounted for the lion’s share of aggregate market gains while other constituents lag materially.

Quantitatively, when we evaluate cross-sectional returns from March 23, 2020 to March 24, 2026, a subgroup of equities shows cumulative returns that are negative or marginally positive, versus the S&P 500’s multi-year cumulative gain (the index more than doubled by the end of 2021; S&P Dow Jones Indices). For institutional portfolios, the dispersion is significant: in many universes, the bottom quintile of stocks by performance since March 2020 has underperformed the top quintile by several hundred percentage points, a level of dispersion rare in normal markets. Evercore’s list functions as an empirical catalog of that bottom quintile in certain universes, providing a starting point for deeper fundamental reappraisal (CNBC, Mar 24, 2026).

A comparison that matters for portfolio construction is performance versus benchmarks: these beaten-down names have underperformed the S&P 500 on a total-return basis over multiple horizon points (1-, 3-, and 6-year windows), yet many display balance-sheet or revenue stress that is industry-specific rather than system-wide. For example, some travel-related issuers saw revenue declines exceeding 40% in 2020 and slower-than-expected normalization through 2022–2024, while supply-chain exposed industrials faced margin compression that persisted into 2025. The data suggest that underperformance is driven by a mixture of revenue shocks, capital structure stress, and market microstructure (low float/low liquidity).

Sector Implications

Sector-level analysis reveals concentration: the laggards are disproportionately drawn from consumer discretionary sub-sectors, small-cap industrials, and certain regional banks. In consumer discretionary, altered consumer behavior and higher rates suppressed demand recovery in 2022–2024, leaving some issuers structurally smaller than pre-pandemic forecasts. Small-cap industrials have often faced reduced order books and a prolonged capex hiatus, which delayed balance-sheet repair and kept equity prices depressed. Regional banks that tightened underwriting standards and absorbed higher loan-loss provisioning also saw protracted multiple compression relative to national peers.

Conversely, sectors that captured secular growth — large-cap technology, select healthcare franchises, and parts of consumer staples — overtook the market, both in earnings growth and valuation multiples. This divergence creates a quandary for index-focused allocations: while indices may reflect aggregate strength, sector and single-name exposures can produce materially different risk-return outcomes. Institutional investors with concentrated sector exposures therefore must assess both cyclical and structural drivers of lagging names before repositioning.

International comparisons also matter. In Europe and certain emerging markets, pandemic-era losers often recovered at different paces owing to policy responses and sector composition. U.S. idiosyncratic laggards identified by Evercore often share characteristics with those in advanced-economy peers, namely exposure to discretionary spending cycles and higher leverage. For asset allocators, therefore, cross-border substitution and relative-value trades require granular sectoral stress-testing and not just headline index comparisons. For further discussion on sector rotation and structural shifts, see our insights on topic.

Risk Assessment

The persistence of names trading below March 2020 levels introduces multiple risk vectors for institutional investors. First, idiosyncratic downside remains elevated for issuers with weak cash-flow generation and high leverage; absent demonstrable operational recovery, equity valuations can remain impaired for extended periods. Second, event risk — such as renewed geopolitical escalation or unexpected credit-market dislocations — can accentuate downside in thinly traded names. Evercore’s list was published just prior to a phase of easing geopolitical concern in late March 2026, illustrating how event timing can materially change short-term risk premia (CNBC, Mar 24, 2026).

Third, liquidity risk is non-trivial. Stocks trading below pandemic lows often also suffer from low free float and diminished retail interest, which can magnify price moves during stress episodes. For large institutional transactions, market impact and timing risk must be priced into any rebalancing plan. Finally, valuation risk is asymmetric: some names have valuation multiples that already imply prolonged recovery, while others still carry expectations that may be unrealistic given current earnings trajectories.

Mitigation strategies for institutions typically focus on active due diligence, scenario-based stress tests, and tranche-based re-entry frameworks. Risk-managed approaches consider balance-sheet repair times, covenant structures, and the potential need for equity capital — variables that differentiate temporary price dislocation from structural impairment. For a practical framework on assessing dislocated securities, see our institutional research hub at topic.

Outlook

Looking forward, the path for the Evercore-identified cohort hinges on three drivers: macro growth, sector-specific demand normalization, and idiosyncratic execution. If macro growth stabilizes and interest-rate volatility abates, cyclical demand could accelerate, improving revenue visibility for travel, leisure, and certain industrials. Conversely, persistent higher rates or new demand shocks would prolong recovery timelines and maintain valuation pressure. Institutional investors should monitor leading indicators such as order-book trends, booking curves, and regional mobility data to gauge recovery inflection points.

Valuation re-rating for these names will likely be incumbent on demonstrable operational improvement rather than macro re-rating alone. For several issuers, demonstrated margin expansion, robust free-cash-flow generation, and deleveraging will be required before capital markets restore pre-2020 price levels. In the absence of those improvements, market participants may continue to prefer substitutes with clearer earnings trajectories, reinforcing the two-tier market structure observed since 2020.

Finally, liquidity events — M&A, asset sales, or recapitalizations — represent a plausible catalyst for repricing in a subset of names. Private buyers or strategic acquirers may find acquisition targets among companies trading below their 2020 levels, particularly if assets are complementary or if buyers can internalize synergies. However, the realization of such outcomes is uncertain and context-dependent, requiring active event monitoring and catalysts-driven research.

Fazen Capital Perspective

A contrarian but disciplined lens suggests that a subset of Evercore’s identified names could reflect structural dislocations that are not purely fundamental failures but rather market-structure outcomes: concentrated passive flows, reduced retail interest, and a focus on macro narratives over micro recovery stories. Where companies possess durable cash flows and realistic deleveraging paths, price levels below March 2020 can represent a time arbitrage for patient, research-led institutions. That view is contrarian because it runs against the dominant narrative that pandemic-era lows are obsolete across the board; instead, Fazen Capital’s perspective emphasizes granular fundamentals and catalyst identification as the path to separate transient losers from long-term impaired credits.

Operationally, this translates into a checklist-driven approach: verify balance-sheet runway (months of liquidity), revenue-stickiness metrics (year-over-year trends and forward bookings), and management’s willingness and ability to take pro-active measures (asset sales, cost restructuring, or capital raises). We also pay attention to market microstructure signals — sustained low ADS turnover, widening bid-ask spreads, and low analyst coverage — which can extend discounts even where operations stabilize. This differentiated lens is not a recommendation to buy; it is an analytical framework to discern which names merit further fundamental diligence.

Bottom Line

Evercore ISI’s March 24, 2026 list underscores persistent cross-sectional disparities: some stocks remain below March 23, 2020 levels despite a broad market rebound and sectoral recoveries. Institutional investors should treat such lists as a starting point for rigorous, balance-sheet-focused research rather than as a short-hand buy signal.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.

FAQ

Q: How common is it for stocks to trade below pandemic lows six years later?

A: It is uncommon across large-cap indices but not rare for small-cap and idiosyncratic names; market concentration since 2020 has meant that headline index gains mask deep underperformance in the tails. This pattern reflects a combination of sectoral shocks, higher-for-longer rates in 2022–2024, and market-structure concentration.

Q: What metrics should institutions prioritize when evaluating these beaten-down names?

A: Prioritize near-term liquidity (months of runway), covenant thresholds, forward revenue indicators (bookings, bookings-to-bill ratios), and realistic free-cash-flow timelines. Also factor in liquidity and market-impact for potential position sizing. Historical precedence shows that balance-sheet repair and credible recovery plans are primary drivers of sustained price normalization.

Q: Could geopolitical developments reverse the underperformance?

A: Geopolitical easing — as happened in late March 2026 when investor sentiment improved temporarily — can reduce risk premia and provide short-term relief. However, lasting recovery to pre-2020 highs generally requires company-specific operational improvement or structural M&A outcomes, not just macro relief alone.