Starting to move higher after a challenging 2022, cheap large-cap stocks may be on the verge of really turning a corner in 2023.

With the latest Consumer Price Index data signaling that inflation is starting to ease, the Federal Reserve may be moving closer to reversing course on its aggressive rate hike policies.

According to the latest Federal Reserve meeting minutes, a majority of Fed officials are in support of an easing of further rate hikes. This could set the stage for a full-on “Fed pivot,” and a move back to “bear market mode” for stocks, in 2023.

That said, it isn’t a lock this “best case scenario” plays out. Inflation may be easing, but it’s still above desired levels. If this continues, the Fed may be slow to bring interest rates back down.

With this uncertainty, it may be best to focus on stocks that can perform well under either outcome. Fortunately, that’s the case with these seven cheap large-cap stocks. Strong fundamentals and company-specific catalysts could help each one deliver strong returns in 2023 and beyond.

Biogen (BIIB)

Biogen (NASDAQ:BIIB) has really taken off in recent months and for good reason.

Back in late September, shares in the biotech giant spiked upon the release of promising clinical trial results for lecanemab, an Alzheimer’s treatment the company is co-developing with Japan-based pharmaceutical company Eisai (OTCMKTS:ESALY).

Since then, BIIB stock has continued to climb. Mainly, due to disappointing trial results for gantenerumab, a competing Alzheimer’s drug being developed by Roche (OTCMKTS:RHHBY). This development is seen to be a positive for Biogen’s prospects when it comes to bringing its candidate to market.

Still reasonably priced (trading for around 15.5 times earnings), the stock could keep moving higher as its Alzheimer’s drug catalyst continues to play out. At present earning a B rating in Portfolio Grader, consider BIIB one of the top large-caps to buy, whether now or on any weakness following its latest surge.

Devon Energy (DVN)

While interest rates could come down in 2023, it may be a different story for energy prices. That’s good news for exploration and production companies such as Devon Energy (NYSE:DVN).

According to the U.S. Energy Information Administration’s latest short-term energy outlook, although crude oil and natural gas prices are likely to remain below their respective 2022 highs, prices for both commodities are set to remain well above late 2010s/early 2020s levels.

As profitability stays high, the company will have plenty of cash to maintain (and possibly grow) its juicy 7.9% dividend.

This high payout plus the potential for a further jump in earnings (per some analysts) bodes well for DVN. The stock already is up 53% year-to-date and could keep on delivering strong returns in 2023. With a price-to-earnings ratio of 7.2, DVN (which earns an A in Portfolio Grader) also sports a very low valuation.

Occidental Petroleum (OXY)

Like Devon Energy, Occidental Petroleum (NYSE:OXY) is another one of the best cheap large-cap stocks in the energy sector.

Occidental’s shares have zoomed more than 126% so far in 2022, for two reasons. First, of course, due to this year’s tailwinds for oil and gas.

Second, the accumulation of shares by Warren Buffett’s company, Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B), has also been an upward driver for OXY stock. I wouldn’t count on Occidental to more than double once again, but I wouldn’t assume OXY will deliver subpar returns from here, whether in the short-term, or over a longer timeframe.

Given its merits as a high-quality yet cheap stock (OXY trades for only 5.9 times earnings), more investors could follow Buffett’s lead, pushing shares even higher in the short-term. In the long-term, this energy company’s green catalysts could also help keep this A-rated stock a winner.

 Pfizer (PFE)

If you’re searching for a high-grade stock that offers value, yield, and the potential for long-term growth, Pfizer (NYSE:PFE) is a great choice. Yes, shares in the pharmaceutical giant haven’t exactly had a stellar 2022.

Investors have shunned PFE stock, due to concerns about the company’s post-vaccine prospects. Yet while this company’s Covid-19 vaccine-boosted earnings aren’t here to stay, the market may be overreacting, by sending PFE to a valuation that prices it at just 9.5 times earnings.

For one, it’s possible that the post-vaccine earnings drop-off will be more gradual than some anticipate. Analyst estimates for 2023 earnings vary widely.

Not only that, success with one or several of the non-Covid vaccine/drug candidates in its pipeline could help make up the difference. While you wait for a possible rebound for B-rated PFE stock, sit tight and collect its steady dividend (3.25% forward yield).

AT&T (T)

In recent years, many investors have tried to call a bottom in AT&T (NYSE:T), only to see shares in the telecom giant tumble further, creating frustration and regret. However, after many years as a value-trap and a yield trap, the story appears to be finally changing.

T stock has rallied since October, thanks to a combination of a strong earnings report, analyst upgrades, and renewed optimism for its turnaround. After divesting its media business earlier this year, AT&T’s management became 100% focused on its main telecommunications business.

This increased focus appears to be already paying off.  As seen in the results for last quarter, subscriber growth has picked back up, and the company reported its best year-over-year wireless service revenue growth in more than a decade.

If this growth re-acceleration continues, B-rated T stock could provide investors additional gains, alongside its high dividend (5.81% forward annual yield).

Viatris (VTRS)

Viatris (NASDAQ:VTRS) is another of the cheap large-cap stocks looking to shake off its former “value trap” reputation. Shares in this pharmaceutical company performed poorly in 2021, and for most of 2022.

Over the past two months, though, Wall Street sentiment for VTRS stock has begun to swing back to positive. Shares have rallied around 34% as a result of the company’s plans to make two new acquisitions.

As InvestorPlace’s David Moadel discussed on Nov. 7, Viatris has pending deals to acquire Oyster Point Pharma (NASDAQ:OYST) and Famy Life Sciences, both specialists in the ophthalmology space.

Viatris believes these transactions could add an additional $1 billion to revenue, and at least $500 million to adjusted EBITDA, by 2028. Combined with the company’s share repurchase and debt reduction activities, after a rough debut, VTRS (rated B in Portfolio Grader), could continue to make a comeback.

Exxon Mobil (XOM)

The 2022 surge in oil and gas prices has produced a gusher of increased profitability for integrated oil company Exxon Mobil (NYSE:XOM). Investors have bid up the stock in response, to the tune of 73%, since the start of the year.

I wouldn’t assume XOM stock will appreciate by a similarly-sized amount in 2023, yet there is a path for the venerable energy giant to “level up” on its recent success. First, Exxon Mobil is continuing to reduce its operating costs, all way down to the office space level.

Management is then passing back the bulk of these cost savings to investors in the form of dividends and buybacks. Second, the company is pursuing “green” opportunities that are not only in fashion but offer the potential for a high return on investment. Both these efforts point a bright future ahead for A-rated XOM stock.

On the date of publication, Louis Navellier had a long position in DVN and XOM. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.