12 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 Sept. 18, 29 stocks saw their ratings change to 4 stars, while 12 joined the 59 US-listed names in 5-star territory.

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

• Pepsico PEP
• Comcast CMCSA
• Realty Income O
• Amrize AMRZ
• Broadridge BR

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 Total Market Index fell 0.17% over the past week as of Sept. 18, leaving the overall US stock market moderately undervalued, hovering at an 8% discount to its fair value estimate on a market cap-weighted basis.

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

• 40% are undervalued, 42% are fairly valued, and 18% are overvalued.
• 29 are newly undervalued.
• Three are newly overvalued.
• 12 moved from a 4-star rating to a 5-star rating.
• Zero moved from a 5-star rating to a 4-star rating.
• Among the newly undervalued stocks, zero jumped from a 3-star rating to a 5-star rating.
• Two are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Pepsico PEP

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $169
• Uncertainty Rating: Low

Non-alcoholic beverages company Pepsico dropped 4.82% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 7.66% over the past three months and 4.07% over the past year. The stock’s price is 23% below its fair value estimate of $169, with an Uncertainty Rating of Low. The large-value stock has a wide economic moat.

Comcast CMCSA

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $36
• Uncertainty Rating: Medium

Telecom services firm Comcast lost 9.76% over the past week, shifting its Morningstar Rating to 5 stars from 4. Comcast has climbed 2.79% over the past three months and has dropped 20.84% over the past year. The stock is trading at a 37% discount to its fair value estimate of $36, with an Uncertainty Rating of Medium. Comcast is a mid-value company with a narrow economic moat.

Realty Income O

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $74
• Uncertainty Rating: Low

Following a 4.77% loss over the past week, retail REIT Realty Income saw its Morningstar Rating move to 5 stars from 4. Realty Income has lost 4.71% over the past three months and has gained 1.07% over the past year. The mid-core stock has no economic moat. Realty Income is trading at a 23% discount to its fair value estimate of $74, with an Uncertainty Rating of Low.

Amrize AMRZ

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $59
• Uncertainty Rating: Medium

Building materials firm Amrize lost 7.35% over the past week, shifting its Morningstar Rating to 5 stars from 4. Amrize has dropped 32.01% over the past three months and 27.24% over the past year. The stock is trading at a 36% discount to its fair value estimate of $59, with an Uncertainty Rating of Medium. Amrize is a large-core company with a narrow economic moat.

Broadridge BR

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $250
• Uncertainty Rating: Medium

Information technology services company Broadridge dropped 2.75% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is up 19.28% over the past three months and is down 31.22% over the past year. The stock’s price is 35% below its fair value estimate of $250, with an Uncertainty Rating of Medium. The mid-core stock has a wide economic moat.