Every Monday, get Morningstar’s insights on company news, the latest stock market trends, and in-depth company reports from our analysts. Sign up for our Stock Strategist newsletter here.
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 5-star stocks, ordered by market capitalization, are:
- Salesforce CRM
- Intercontinental Exchange ICE
- Dassault Systèmes DASTY
- Tyler Technologies TYL
- EPAM Systems EPAM
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 5-Star Stocks
Salesforce
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $280.00
- Uncertainty Rating: High
Software application firm Salesforce dropped 8.51% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 21.75% over the past three months and 41.01% over the past year. The stock’s price is 46% below its fair value estimate of $280 per share, with an Uncertainty Rating of High. The large-value stock has a narrow economic moat.
Intercontinental Exchange
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $174.00
- Uncertainty Rating: Low
Financial data firm Intercontinental Exchange lost 4.38% over the past week, shifting its Morningstar Rating to 5 stars from 4. Intercontinental Exchange has dropped 15.22% over the past three months and 24.57% over the past year. The stock is trading at a 23% discount to its fair value estimate of $174 per share, with an Uncertainty Rating of Low. Intercontinental Exchange is a mid-core company with a wide economic moat.
Dassault Systèmes
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $29.30
- Uncertainty Rating: Medium
Following a 1.91% loss over the past week, software application firm Dassault saw its Morningstar Rating move to 5 stars from 4. Dassault has lost 3.16% over the past three months and 44.74% over the past year. The large-core stock has a wide economic moat. Dassault is trading at a 33% discount to its fair value estimate of $29.30 per share, with an Uncertainty Rating of Medium.
Tyler Technologies
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $500.00
- Uncertainty Rating: High
Software application firm Tyler lost 6.67% over the past week, shifting its Morningstar Rating to 5 stars from 4. Tyler has dropped 20.33% over the past three months and 50.95% over the past year. The stock is trading at a 44% discount to its fair value estimate of $500 per share, with an Uncertainty Rating of High. Tyler is a small-core company with a wide economic moat.
EPAM Systems
- Morningstar Rating: ★★★★★
- Fair Value Estimate: $136.00
- Uncertainty Rating: High
Following a 19.65% loss over the past week, information technology services company EPAM saw its Morningstar Rating move to 5 stars from 4. EPAM has lost 43.51% over the past three months and 53.56% over the past year. The small-value stock has no economic moat. EPAM is trading at a 44% discount to its fair value estimate of $136 per share, with an Uncertainty Rating of High.
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.
