As recession fears grow on Wall Street, CNBC Pro found stocks that are cheap even in an economic slowdown. The major averages are heading for a losing week on Friday. Investors are concerned that this week’s announcement of the most aggressive rate increase since 1994 by the Federal Reserve could tip the economy into a recession. Stocks may also continue to spiral if earnings estimates come down. This week, Deutsche Bank analysts said earnings estimates are “too high,” given their base assumption of a modest recession by the end of 2023. They called out mega cap growth and tech stocks as particularly vulnerable to elevated expectations. Still, some stocks may present investors with a “margin of safety” over the long term even in a recession scenario. CNBC Pro lowered the 12-month earnings estimates of every company in the S&P 500 by 30% to calculate the forward price-earnings ratio of each stock in a recession scenario. We then compared the new recession-adjusted forward P / E to the average P / E of the last five years. To be sure, these are long-term investing opportunities to take advantage of in the current sell-off as they should reflect the real value of securities over time. Here are the 20 cheapest stocks in the S&P 500 in a recession scenario: Many energy stocks made it onto the list. Shares of Occidental Petroleum are expected to sell at 8.8 times its earnings after adjusting for recession, meaning it will trade at a 65.7% discount to its 5-year average forward P / E of 25.8. Shares of Valero Energy should trade at a P / E of 12.2 even in a downturn, at a 54% discount to its 5-year average forward earnings. Shares of Diamondback Energy are expected to trade at 7.9 times earnings in a recession, or at a 33% discount. Alaska Air could be cheap even after estimates come down. Even after cutting earnings estimates for a recession scenario, the airline carrier is expected to trade at 10.6 times its earnings, or at a nearly 63% discount. United Airlines also made it onto the list. The P / E ratio of the airline is expected to be 13.7 in a recession, or at a 45% discount. Some homebuilders also look like buying opportunities in a recession scenario. DR Horton has a recession P / E of 5.2, which would be at a 46% discount to the average forward earnings of the last five years. Lennar has a recession P / E of 5.6, a 37% discount. PulteGroup has a recession P / E of 4.7, or at a nearly 43% discount. Other stocks included in this list are Mosaic, Moderna, EOG Resources, Devon Energy, Pioneer Natural Resources, Chevron, Exxon Mobil, PVH, Coterra Energy, Weyerhaeuser, Global Payments and Nucor.

These stocks could be cheap buys for the long term even if a recession hits