10 New 5-Star Stocks This Week

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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 March 20, 23 stocks saw their ratings change to 4 stars, while 10 joined the 72 US-listed names in 5-star territory.

The five new 5-star stocks with the largest market capitalization are:

• Lennar LEN
• Equifax EFX
• Warner Music Group WMG
• Fresenius Medical Care FMS
• Masco MAS

The full list of new 5-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 fell 1.82% over the past week as of March 20, leaving the overall US stock market significantly undervalued, hovering at a 13.00% discount to its fair value estimate on a market cap-weighted basis.

Of the 832 US-listed stocks covered by Morningstar analysts:

• 42% are undervalued, 41% are fairly valued, and 17% are overvalued.
• 23 are newly undervalued.
• Five are newly overvalued.
• 10 moved from a 4-star rating to a 5-star rating.
• Two 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.
• One is no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Lennar

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $159.00
• Uncertainty Rating: High

Residential construction company Lennar lost 4.64% over the past week, shifting its Morningstar Rating to 5 stars from 4. Lennar has dropped 15.79% over the past three months and 23.24% over the past year. The stock is trading at a 43% discount to its fair value estimate of $159 per share, with an Uncertainty Rating of High. Lennar is a mid-value company with no economic moat.

Equifax

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $270.00
• Uncertainty Rating: Medium

Following a 3.40% loss over the past week, consulting firm Equifax saw its Morningstar Rating move to 5 stars from 4. Equifax has lost 18.55% over the past three months and 26.20% over the past year. The mid-growth stock has a wide economic moat. Equifax is trading at a 34% discount to its fair value estimate of $270 per share, with an Uncertainty Rating of Medium.

Warner Music Group

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $37.00
• Uncertainty Rating: Medium

Entertainment company Warner Music lost 12.55% over the past week, shifting its Morningstar Rating to 5 stars from 4. Warner Music has dropped 18.07% over the past three months and 24.56% over the past year. The stock is trading at a 35% discount to its fair value estimate of $37 per share, with an Uncertainty Rating of Medium. Warner Music is a mid-growth company with a narrow economic moat.

Fresenius Medical Care

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $38.00
• Uncertainty Rating: High

Medical care facilities firm Fresenius dropped 5.05% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 7.95% over the past three months and 9.64% over the past year. The stock’s price is 43% below its fair value estimate of $38 per share, with an Uncertainty Rating of High. The mid-value stock has a narrow economic moat.

Masco

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $88.00
• Uncertainty Rating: Medium

Following a 4.36% loss over the past week, building products and equipment firm Masco saw its Morningstar Rating move to 5 stars from 4. Masco has lost 7.84% over the past three months and 14.85% over the past year. The mid-value stock has a wide economic moat. Masco is trading at a 33% discount to its fair value estimate of $88 per share, with an Uncertainty Rating of Medium.