Morningstar

1 New 5-Star Stock This Week

ResMed fell into 5-star territory.

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Securities in This Article
ResMed Inc
(RMD)

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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

Morningstar Ratings
. For the week ended May 29, 11 stocks saw their ratings change to 4 stars, while one joined the 78 US-listed names in 5-star territory.

The new 5-star stock is:

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

fair value estimate
—Morningstar’s estimate of its intrinsic worth—and its
Uncertainty Rating
, 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 1.53% over the past week as of May 29, leaving the overall US stock market slightly undervalued, hovering at a 4% discount to its fair value estimate on a market cap-weighted basis.

Of the 870 US-listed stocks covered by Morningstar analysts:

  • 41% are undervalued, 37% are fairly valued, and 22% are overvalued.
  • 11 are newly undervalued.
  • 19 are newly overvalued.
  • One moved from a 4-star rating to a 5-star rating.
  • Nine 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.
  • 25 are no longer undervalued.

Metrics for This Week’s New 5-Star Stock

ResMed

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $290.00
  • Uncertainty Rating: Medium

Medical supplies company ResMed lost 8.40% over the past week, shifting its Morningstar Rating to 5 stars from 4. ResMed has dropped 25.41% over the past three months and 21.48% over the past year. The stock is trading at a 34% discount to its fair value estimate of $290, with an Uncertainty Rating of Medium. ResMed is a mid-core company with a narrow economic moat.

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.

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