10 Stocks with the Largest Fair Value Estimate Increases During Q2 Earnings

A quarter marked by the fastest earnings growth since 2021 saw Morningstar analysts raising fair value estimates on many of the stocks they cover, albeit at a slower pace than in recent quarters.

At the time of writing, roughly 90% of the 835 US-listed stocks covered by Morningstar analysts have reported earnings. There are some major names yet to come, including Nvidia NVDA next week, while Broadcom AVGO, Adobe ADBE, and Oracle ORCL are scheduled to release results in September.

For the companies that have reported so far, Morningstar analysts raised fair value estimates by an average of 1.5% during the second-quarter earnings season, below last quarter’s 2.8% average.

Among the stocks with valuation changes, 7.4% saw increases of 10.0% or more, down from 11.4% for the first quarter. Over the past decade, 6.8% of the group had average quarterly fair value estimate increases of 10.0% or more.

The energy and technology sectors saw the highest increases in the most recent quarter. Roughly 20.6% of energy stocks saw a fair value increase of at least 10.0% after second-quarter earnings, and the average increase was 5.8%. Among tech companies, 15.7% had fair value increases of at least 10.0%, and the average increase was 3.0%.

Here are the stocks with the largest percentage increases in their fair value estimates:

1. ASML ASML: $2,050 from $1,400
2. Expand Energy EXE: $144 from $101
3. Lam Research LRCX: $310 from $220
4. Bloom Energy BE: $97 from $70
5. Fortinet FTNT: $143 from $108
6. BorgWarner BWA: $62 from $48
7. Cisco Systems CSCO: $115 from $90
8. Range Resources RRC: $46 from $36
9. Teradyne TER: $350 from $275
10. Twilio TWLO: $190 from $150

Here’s what Morningstar analysts had to say about each stock.

ASML

• Fair Value Estimate
  : $2,050.00
• Fair Value Increase: 46%
• Morningstar Rating
  : ★★★
• Economic Moat
  : Wide

“We are updating our long-term ASML forecasts, as the firm intends to expand Low-NA EUV and DUV immersion capacity by 30% in 2027 and another potential 30% in 2028.

“Expansion would bring capacity to 85/110 Low-NA EUV systems by 2027-28 and 170/220 DUV immersion systems by 2027-28, compared with today’s 65 and 130 units, respectively. The high-demand environment has become more real in the second quarter, as customers have begun committing orders with down payments, giving ASML confidence to expand. The new 2027 capacity is virtually all booked, and we estimate the additional 30% 2028 expansion is very likely to proceed as ASML has already received large orders.”

—Javier Correonero, senior equity analyst

Correonero has more about ASML here.

Expand Energy

• Fair Value Estimate: $144.00
• Fair Value Increase: 43%
• Morningstar Rating: ★★★★
• Economic Moat: None

“Expand Energy saw two fair value changes during the quarter—one up and one down. The most recent, rising to $144 from $99, came after Morningstar’s equity analysts updated their long-term price estimate for Henry Hub natural gas. “Our Henry Hub midcycle price is the most powerful driver for natural gas producers,” wrote equity analyst Adam Baker. “Increasing it greatly improves our outlook for the firm’s earning potential in a normalized environment. Higher gas prices should boost profit margins for coal and nuclear power generators. We are raising our midcycle Henry Hub price to $3.70 per thousand cubic feet from $3.30/mcf. As a result, our fair value estimates for natural gas producers increased by about 30% on average.

Earlier in the quarter, Baker slightly lowered Expand Energy’s fair value to $99 from $101 following the firm’s acquisition of Twin Eagle Holdings, a natural gas marketer. “The $1.25 billion acquisition makes Expand one of the nation’s largest gas marketers, matching its title as the largest gas producer,” he wrote. “Expand’s strategic vision of cutting out middlemen required a large move, and buying a middleman advances it. Despite boosting our outlook for the firm’s marketing business, lower commodity prices reduced our fair value.”

Read Baker’s full take on Expand Energy here.

Lam Research

• Fair Value Estimate: $310.00
• Fair Value Increase: 41%
• Morningstar Rating: ★★★
• Economic Moat: Wide

“Lam reported great June-quarter results and even better guidance. Sales rose 30% year over year, and September guidance calls for 52% year-over-year growth at the midpoint. Lam also raised its long-term margin targets by 500 to 1000 basis points versus its 2025 investor day targets.

“Artificial intelligence infrastructure investments and the resulting chip supply buildout are driving accelerating momentum through calendar 2028. Lam’s performance against this backdrop has been phenomenal, and we see it gaining share over immense underlying demand.”

—William Kerwin, senior equity analyst

Kerwin has more about Lam Research here.

Bloom Energy

• Fair Value Estimate: $97.00
• Fair Value Increase: 39%
• Morningstar Rating: ★★
• Economic Moat: None

“Bloom’s second-quarter revenue rose to $1.065 billion, up 166% year on year, while non-GAAP gross margin of 34.3% rose 604 basis points. Management lifted full-year guidance for revenue and non-GAAP operating income to midpoints of $4.05 billion and $850 million, respectively.

“Bloom’s earnings print once again soared as it continues to benefit from time-to-power data center constraints. Whereas traditional gas power equipment takes years to deliver, Bloom can deliver its solid oxide fuel cell systems in months. This time arbitrage helps results.”

—Joshua Aguilar, director of equity research

The rest of Aguilar’s take on Bloom Energy can be found here.

Fortinet

• Fair Value Estimate: $143.00
• Fair Value Increase: 32%
• Morningstar Rating: ★★★
• Economic Moat: Wide

“Fortinet closed out its second quarter with sales growing 26% to $2 billion and its adjusted operating margin expanding 5 points to 38%. The firm’s nascent secure access service edge, or SASE, and SecOps offerings contributed 34% of total billings.

“We continue to remain optimistic on Fortinet’s strategy to diversify beyond network firewalls into growing security areas, including SASE, SecOps, and operational technology security. We also see artificial intelligence-driven demand continuing to bolster Fortinet’s top-line growth.”

—Malik Ahmed Khan, senior equity analyst

Take a deeper dive into Khan’s outlook for Fortinet.

BorgWarner

• Fair Value Estimate: $62.00
• Fair Value Increase: 29%
• Morningstar Rating: ★★★
• Economic Moat: Narrow

“BorgWarner increased second-quarter sales by 0.3% and adjusted operating income by 11% year over year, improving its adjusted operating income margin by 100 basis points to 11.3%. Strong profitability supports an increase in its share repurchase program by $1 billion.”

“This result shows another period of strong execution by management, using strong cost control to drive double-digit earnings growth despite organic net sales, excluding battery sales, declining 1.2%, reflecting the direction of the market.”

—Rella Suskin, equity analyst

Read Suskin’s full take on BorgWarner here.

Cisco Systems

• Fair Value Estimate: $115.00
• Fair Value Increase: 28%
• Morningstar Rating: ★★★
• Economic Moat: Wide

“We’ve refreshed our model assumptions for Cisco ahead of the firm’s fiscal fourth-quarter earnings report on Aug. 12. We’re more constructive on Cisco’s longer-term growth in the age of AI. We believe Cisco has a durable, sticky position in AI networking and optics, structurally raising its growth and warranting a higher valuation.

“We raise our fair value estimate for wide-moat Cisco to $115 per share from $90 to reflect durably higher growth from AI. We raise our Uncertainty rating to High from Medium to reflect AI spending variability. Cisco fared well in the tech selloff in the last month, and shares look fairly valued.”

—William Kerwin

The rest of Kerwin’s take on Cisco can be found here.

Range Resources

• Fair Value Estimate: $46.00
• Fair Value Increase: 28%
• Morningstar Rating: ★★★
• Economic Moat: None

Range saw two fair value estimate hikes in the quarter. The most recent, to $46 per share from $37, came on the Henry Hub midcycle price update.

Earlier in the quarter, Range’s fair value estimate increased slightly to $37 per share from $36 following its earnings report. “Range reported adjusted EBITDA on the high end of PitchBook estimates, $293 million versus $284 million median, with shares reacting positively,” Baker wrote. “There were no announcements that materially changed the story, with the focus on opportunities in the face of near-term price weakness.”

—Adam Baker

Investors can find more of Baker’s take on Range Resources here.

Teradyne

• Fair Value Estimate: $350.00
• Fair Value Increase: 27%
• Morningstar Rating: ★★★
• Economic Moat: Wide

“Teradyne’s strong second-quarter results came in well above guidance, and it raised its guidance for the second half of 2026. Sales rose 104% year over year to $1.33 billion. The implied 2026 full-year revenue guide came up more than 10% from last quarter, now implying 60% growth at the midpoint.

“Teradyne’s expanding its penetration in compute chip testing for artificial intelligence should generate massive growth for the next few years. Building on existing strength in Google’s TPU, it has qualified as a second source in Nvidia’s GPU testing and benefits from Arm CPUs gaining share.”

—William Kerwin

The rest of Kerwin’s take on Teradyne can be found here.

Twilio

• Fair Value Estimate: $190.00
• Fair Value Increase: 27%
• Morningstar Rating: ★★
• Economic Moat: None

“Twilio delivered strong second-quarter results that exceeded the high end of guidance. Revenue grew 22% year over year to $1.5 billion, and non-GAAP operating margins came in at 19%. Management materially raised the full-year revenue and profitability guidance.

“Artificial intelligence tailwinds are showing up in Twilio’s results, as evidenced by another step up in the organic growth rate to 17% year over year, from the 16% reported last quarter. Voice AI continues to be an increasingly important contributor, accelerating more than 20%.”

—Dan Romanoff, senior equity analyst

Take a deeper dive into Romanoff’s outlook for Twilio.