18 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 fallen into ranges worthy of 4- or 5-star

. For the week ended Feb. 27, 18 stocks saw their ratings change to 4 stars, while three joined the 60 US-listed names in 5-star territory

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

• Bank of America BAC
• Deutsche Telekom DTEGY
• MercadoLibre MELI
• Snowflake SNOW
• NXP Semiconductors NXPI

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 0.46% over the past week as of Feb. 27, leaving the overall US stock market moderately undervalued, hovering at a 7% discount to its fair value estimate on a market cap-weighted basis.

Of the 827 US-listed stocks covered by Morningstar analysts:

• 35% are undervalued, 40% are fairly valued, and 26% are overvalued.
• 18 are newly undervalued.
• 14 are newly overvalued.
• Three moved from a 4-star rating to a 5-star rating.
• Eight 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.
• 13 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Bank of America

• Morningstar Rating: ★★★★
• Fair Value Estimate: $58.00
• Uncertainty Rating: Medium

Diversified bank Bank of America lost 6.09% over the past week, shifting its Morningstar Rating to 4 stars from 3. Bank of America has dropped 5.48% over the past three months and has climbed 15.55% over the past year. The stock is trading at a 14% discount to its fair value estimate of $58 per share, with an Uncertainty Rating of Medium. Bank of America is a large-value company with a wide economic moat.

Deutsche Telekom

• Morningstar Rating: ★★★★
• Fair Value Estimate: $44.00
• Uncertainty Rating: Medium

Telecom services firm Deutsche Telekom climbed 4.03% over the past week. The company’s stock is up 25.68% over the past three months and 15.92% over the past year. The stock’s fair value estimate rose to $44 per share from $39 during the week. It ended the week trading at an 8% discount to its new fair value estimate, with an Uncertainty Rating of Medium. The large-value stock has a narrow economic moat.

MercadoLibre

• Morningstar Rating: ★★★★
• Fair Value Estimate: $2,190.00
• Uncertainty Rating: High

Internet retail company MercadoLibre lost 11.98% over the past week, shifting its Morningstar Rating to 4 stars from 3. MercadoLibre has dropped 13.56% over the past three months and 17.48% over the past year. The stock is trading at a 20% discount to its fair value estimate of $2,190 per share, with an Uncertainty Rating of High. MercadoLibre is a large-growth company with a wide economic moat.

Snowflake

• Morningstar Rating: ★★★★
• Fair Value Estimate: $223.00
• Uncertainty Rating: Very High

Software application firm Snowflake dropped 2.37% over the past week. The company’s stock is down 32.27% over the past three months and 3.04% over the past year. The stock’s fair value estimate rose to $223 per share from $193 during the week. It ended the week trading at a 24% discount to its new fair value estimate, with an Uncertainty Rating of Very High. The mid-growth stock has no economic moat.

NXP Semiconductors

• Morningstar Rating: ★★★★
• Fair Value Estimate: $280.00
• Uncertainty Rating: High

Semiconductor company NXP lost 2.26% over the past week, shifting its Morningstar Rating to 4 stars from 3. NXP has climbed 17.68% over the past three months and 6.63% over the past year. The stock is trading at a 19% discount to its fair value estimate of $280 per share, with an Uncertainty Rating of High. NXP is a large-core company with a wide economic moat.