Investors concerned about Federal Reserve interest rate hikes and their impact on the stock market may want to consider value stocks. The companies are those that are currently trading below their intrinsic values. Value stocks held up better last year than the broader market, as the Federal Reserve raised rates to stamp out inflation. The iShares Russell 1,000 Value ETF (IWD) dipped 9.7% in 2022, while the S & P 500 lost 19% and tumbled into a bear market. The S & P 500 is doing slightly better to start 2023, but expectations of tighter monetary policy for longer could make value more attractive again. With that in mind, CNBC Pro screened for value stocks that are rated at least 4 stars by Morningstar and are outperforming the market with a year-to-date gain of at least 5%. They also have at 10% or more upside to the average analyst price target, per FactSet. Five-star rated Citigroup is up 11% for the year and has almost 12% upside to the average analyst price target. Last month, Morningstar noted the stock was trading at a steep discount to its fair value estimates. “We do think over time Citi will continue to generate returns slightly above its cost of equity,” Dave Sekera, chief U.S. market strategist for Morningstar, said on CNBC’s “Street Signs Asia” in January. “Over time that stock really should appreciate towards tangible book value.” Medtronic is another name trading at a big discount, Sekera pointed out. The medical-device maker is a play on the long-term, structural growth expected in the medical technology space, he said. While patients put off during Covid, as the pandemic “fades in the rear-view mirror,” Medtronic should benefit, he explained. Shares are up more than 10% year to date and have another 5% upside to the average analyst price target. Truist Financial is also up about 10% this year. The bank announced last week it agreed to sell 20% of its insurance holdings for nearly $2 billion. “After also accounting for $5bn of inter-company preferred equity issued by Truist Insurance Holdings to Truist, this transaction values all of TFT Insurance at $15bn. That translates into 17x EBITDA and 27x [earnings]. Those are gaudy numbers when you consider that TFC only trades for 10x EPS,” Gordon Haskett analyst Don Bilson wrote in a note last Thursday. TFC YTD mountain Truist Financial’s year-to-date performance Truist can rally nearly 11% upside over the next 12 months, based on the average analyst price target. Ford Motor shares could also rally almost 11%, according to the average analyst price target. Last week, the automaker suspended production on its electric F-150 Lightning pickup to deal with a potential battery issue after a vehicle caught fire. Ford also recently reported dismal fourth-quarter earnings and fell short of its own full-year guidance by $1.1 billion. “We should have done much better last year,” CEO Jim Farley said in an earnings release. “We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.” Ford shares are up nearly 6% year to date. —CNBC’s Fred Imbert, Michael Bloom and Weizhen Tan contributed reporting.