Morningstar

13 New 5-Star Stocks This Week

Zoetis and Crown Castle are now seen as significantly undervalued.

The Estee Lauder seen on a store.
Alex Tai/SOPA Images via Getty
Securities in This Article
Zoetis Inc Class A
(ZTS)
Crown Castle Inc
(CCI)
SBA Communications Corp Class A
(SBAC)
Zscaler Inc
(ZS)
The Estee Lauder Companies Inc Class A
(EL)

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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 March 27, 22 stocks saw their ratings change to 4 stars, while 13 joined the 85 US-listed names in 5-star territory.

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

  • Zoetis ZTS
  • Crown Castle International CCI
  • Estée Lauder EL
  • Zscaler ZS
  • SBA Communications SBAC

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

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 fell 1.99% over the past week as of March 27, leaving the overall US stock market significantly undervalued, hovering at a 15.00% discount to its fair value estimate on a market-cap-weighted basis.

Of the 831 US-listed stocks covered by Morningstar analysts:

  • 44% are undervalued, 40% are fairly valued, and 17% are overvalued.
  • 22 are newly undervalued.
  • 12 are newly overvalued.
  • 13 moved from a 4-star rating to a 5-star rating.
  • Zero 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.
  • Nine are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Zoetis

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $171.00
  • Uncertainty Rating: Medium

Following a 2.01% loss over the past week, drug manufacturer Zoetis saw its Morningstar Rating move to 5 stars from 4. Zoetis has lost 9.82% over the past three months and 30.31% over the past year. The mid-core stock has a wide economic moat. Zoetis is trading at a 34% discount to its fair value estimate of $171 per share, with an Uncertainty Rating of Medium.

Crown Castle International

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $117.00
  • Uncertainty Rating: Medium

Specialty REIT Crown Castle lost 4.58% over the past week, shifting its Morningstar Rating to 5 stars from 4. Crown Castle has dropped 9.90% over the past three months and 19.80% over the past year. The stock is trading at a 33% discount to its fair value estimate of $117 per share, with an Uncertainty Rating of Medium. Crown Castle is a mid-value company with a narrow economic moat.

Estée Lauder

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $120.00
  • Uncertainty Rating: High

Household and personal products company Estée Lauder dropped 21.75% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 37.35% over the past three months and is up 2.03% over the past year. The stock’s price is 44% below its fair value estimate of $120 per share, with an Uncertainty Rating of High. The mid-growth stock has a wide economic moat.

Zscaler

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $300.00
  • Uncertainty Rating: Very High

Software infrastructure firm Zscaler lost 12.09% over the past week, shifting its Morningstar Rating to 5 stars from 4. Zscaler has dropped 42.23% over the past three months and 36.42% over the past year. The stock is trading at a 56% discount to its fair value estimate of $300 per share, with an Uncertainty Rating of Very High. Zscaler is a mid-growth company with a narrow economic moat.

SBA Communications

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $250.00
  • Uncertainty Rating: Medium

Following a 4.07% loss over the past week, specialty REIT SBA saw its Morningstar Rating move to 5 stars from 4. SBA has lost 12.68% over the past three months and 21.06% over the past year. The mid-value stock has a narrow economic moat. SBA is trading at a 33% discount to its fair value estimate of $250 per share, with an Uncertainty Rating of Medium.

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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