Look out! 9 big stocks still aren't cheap

You might think a 10% smack down in the markets would put just about every stock on a deep sale. But there are still a few stocks left that hover above what experts think they're worth.

Nine stocks in the Standard & Poor's 500, including utility Consolidated Edison (ED), industrial company Pall (PLL) and soupmaker Campbell Soup (CPB), are still trading above what analysts' 18-month price targets, according to a USA TODAY analysis of data from S&P Capital IQ.

It's been quite some time since investors spent a moment thinking much about stocks being overvalued, or facing downside. But the market's sudden meltdown, which kicked off last week and gained intensity Monday, is replacing investors' greed with fear. The Standard & Poor's 500 has lost more than 11% of its value since hitting an all-time high on May 21 — putting the market squarely in correction. On Monday alone, the S&P 500 dropped nearly 4%.

One of investors' biggest fears up until now has been missing out on the bull market's next leg higher. That's quickly changed. Stocks in the Standard & Poor's 500 are now down an average of 12% from where they were trading back on May 21. That puts the focus on the downside.

Most of the stocks that analysts still think have overshot their fair value are the ones that have held up as the rest of the market has fallen. The nine stocks analysts warn about as the most overvalued have gained an average of 3.9% since the market's May 21 high. Most of these stocks are highly defensive, meaning they sell goods or services that tend to be in demand even during economic slowdowns.

Take Consolidated Edison, an electric, gas and steam utility serving mainly New York City. The stock has been a pillar of strength, with its dividend yield of 3.9% and shares up 3.3% since the market topped. The stock Monday faded $2.69, or 4.1%, to $63.37 — but that means it's still nearly 3% above the $61.71 a share the stock should be worth in 18 months, say analysts polled by S&P Capital IQ.

Campbell Soup is another example of a stock that's held up well in the market meltdown, that analysts think could fall. Shares are up 0.2% since the May 21 high — despite falling $1.60, or 3.3%, to $47.01 Monday. The problem is analysts think the stock is worth $46.33 a share, which would be another 1.4% lower still. And Pall, a maker of filtration and purification systems, is up 1.6% as the rest of the market has melted down. Shares dropped 28 cents to $126.27. That means there's still 5.4% downside to the target.

Just because stocks overshoot targets doesn't mean they have to fall. Analysts will revise their targets to reflect the market's turbulence. Many of these stocks also pay market-beating dividends, which offers a bit of protection. Finally, it's not like these stocks are wildly overvalued. These stocks have an average downside potential of 3.1%.

The downside may never occur, either. Consider AGL Resources, which distributes national gas mainly in seven states, including Illinois, Georgia and Virginia. It's is the stock that's the most overvalued relative to analysts' forecasts. Shares closed Monday up $13.55, or 28.3%, to $61.41, making it a rare beacon of hope in a market awash in red and selling. But shares were up sharply after utility Southern said it would buy the company for $8 billion in cash.

There's no question much of the excesses have been squeezed out of the market. Analysts are forecasting that 490 of the stocks in the S&P 500 should be worth more in 18 months. The average expected upside is 24%. Many of these estimates, though, could be reduced if the global slowdown worries intensify.

But for now, investors are hoping the bottom for most stocks is in.