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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star
. For the week ended June 18, 12 stocks saw their ratings change to 4 stars, while five joined the 85 US-listed names in 5-star territory.
The five new 4-star stocks with the largest market capitalization are:
The full list of new 4-star stocks can be found at the bottom of this story. All returns in this article are reported in the stock’s base currency, and all data is sourced from Morningstar Direct.
What Is the Morningstar Rating for Stocks?
The Morningstar Rating can help investors identify stocks that are truly undervalued or overvalued, cutting through the market noise. The rating is determined by three factors: a stock’s price, its
—Morningstar’s estimate of its intrinsic worth—and its
, which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.
The Latest Stock Valuation Changes
The Morningstar US Market Index rose 0.99% over the past week as of June 18, leaving the overall US stock market moderately undervalued, hovering at a 7% discount to its fair value estimate on a market-cap-weighted basis.
Of the 875 US-listed stocks covered by Morningstar analysts:
- 40% are undervalued, 37% are fairly valued, and 23% are overvalued.
- 12 are newly undervalued.
- 18 are newly overvalued.
- Five moved from a 4-star rating to a 5-star rating.
- One moved from a 5-star rating to a 4-star rating.
- None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
- 20 are no longer undervalued.
Metrics for This Week’s New 4-Star Stocks
Spotify
- Morningstar Rating: ★★★★
- Fair Value Estimate: $560.00
- Uncertainty Rating: High
Internet content company Spotify lost 2.89% over the past week, shifting its Morningstar Rating to 4 stars from 3. Spotify has dropped 2.99% over the past three months and 34.09% over the past year. The stock is trading at a 16% discount to its fair value estimate of $560 per share, with an Uncertainty Rating of High. Spotify is a large-core company with a narrow economic moat.
Elevance Health
- Morningstar Rating: ★★★★
- Fair Value Estimate: $474.00
- Uncertainty Rating: High
Following a 3.85% loss over the past week, healthcare plans company Elevance saw its Morningstar Rating move to 4 stars from 3. Elevance has gained 34.00% over the past three months and 5.55% over the past year. The mid-value stock has a narrow economic moat. Elevance is trading at an 18% discount to its fair value estimate of $474 per share, with an Uncertainty Rating of High.
Las Vegas Sands
- Morningstar Rating: ★★★★
- Fair Value Estimate: $59.00
- Uncertainty Rating: High
Travel and leisure company Las Vegas Sands dropped 3.85% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 9.34% over the past three months and is up 18.94% over the past year. The stock’s price is 17% below its fair value estimate of $59 per share, with an Uncertainty Rating of High. The mid-core stock has a narrow economic moat.
Workday
- Morningstar Rating: ★★★★
- Fair Value Estimate: $150.00
- Uncertainty Rating: High
Software application firm Workday lost 10.60% over the past week, shifting its Morningstar Rating to 4 stars from 3. Workday has dropped 12.33% over the past three months and 50.64% over the past year. The stock is trading at a 22% discount to its fair value estimate of $150 per share, with an Uncertainty Rating of High. Workday is a mid-core company with a narrow economic moat.
CBOE Global Markets
- Morningstar Rating: ★★★★
- Fair Value Estimate: $305
- Uncertainty Rating: Medium
Following a 15.53% loss over the past week, financial data firm CBOE saw its Morningstar Rating move to 4 stars from 3. CBOE has lost 12.23% over the past three months and has gained 10.60% over the past year. The mid-growth stock has a narrow economic moat. CBOE is trading at an 18% discount to its fair value estimate of $305 per share, with an Uncertainty Rating of Medium.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
