12 New 4-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 July 24, 12 stocks saw their ratings change to 4 stars, while three joined the 83 US-listed names in 5-star territory.

The five new 4-star stocks with the largest market capitalization are:

• Tesla TSLA
• TE Connectivity TEL
• STMicroelectronics STM
• Rocket Companies RKT
• Raymond James Financial RJF

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 fell 0.6% over the past week as of July 24, leaving the overall US stock market moderately undervalued, hovering at an 8.0% discount to its fair value estimate on a market-cap-weighted basis.

Of the 880 US-listed stocks covered by Morningstar analysts:

• 35% are undervalued, 42% are fairly valued, and 23% are overvalued.
• 12 are newly undervalued.
• 10 are newly overvalued.
• Three moved from a 4-star rating to a 5-star rating.
• Five 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.
• Seven are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Tesla TSLA

• Morningstar Rating: ★★★★
• Fair Value Estimate: $450.00
• Uncertainty Rating: Very High

Following a 17.81% loss over the past week, auto manufacturer Tesla saw its Morningstar Rating move to 4 stars from 3. Tesla has lost 16.81% over the past three months and has gained 2.53% over the past year. The large-core stock has a narrow economic moat. Tesla is trading at a 30% discount to its fair value estimate of $450 per share, with an Uncertainty Rating of Very High.

TE Connectivity TEL

• Morningstar Rating: ★★★★
• Fair Value Estimate: $230.00
• Uncertainty Rating: Medium

Electronic components company TE lost 0.18% over the past week. TE has dropped 5.10% over the past three months and has climbed 0.05% over the past year. The stock’s fair value estimate rose to $230 per share from $220 during the week. It ended the week trading at a 12% discount to its new fair value estimate, with an Uncertainty Rating of Medium. TE is a large-core company with a narrow economic moat.

STMicroelectronics STM

• Morningstar Rating: ★★★★
• Fair Value Estimate: $72.00
• Uncertainty Rating: Very High

Following a 16.95% loss over the past week, semiconductor company STMicro saw its Morningstar Rating move to 4 stars from 3. STMicro has gained 2.25% over the past three months and 94.88% over the past year. The large-growth stock has a narrow economic moat. STMicro is trading at a 28% discount to its fair value estimate of $72 per share, with an Uncertainty Rating of Very High.

Rocket Companies RKT

• Morningstar Rating: ★★★★
• Fair Value Estimate: $17.20
• Uncertainty Rating: Very High

Mortgage finance firm Rocket dropped 10.25% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 16.35% over the past three months and 12.18% over the past year. The stock’s price is 24% below its fair value estimate of $17.20 per share, with an Uncertainty Rating of Very High. The mid-growth stock has a narrow economic moat.

Raymond James Financial RJF

• Morningstar Rating: ★★★★
• Fair Value Estimate: $187.00
• Uncertainty Rating: Medium

Asset management firm Raymond James gained 0.56% over the past week. Raymond James has climbed 10.73% over the past three months and 2.85% over the past year. The stock’s fair value estimate rose to $187 per share from $178 during the week. It ended the week trading at a 9% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Raymond James is a mid-core company with a narrow economic moat.