Morningstar

21 New 4-Star Stocks This Week

Alphabet and Oracle are among the stocks that fell into undervalued territory.

A view of Google Headquarters.
Tayfun Coskun/Anadolu via Getty
Securities in This Article
Alphabet Inc Class A
(GOOGL)
Oracle Corp
(ORCL)
Bayerische Motoren Werke AG ADR - Unsponsored
(BMWKY)
RTX Corp
(RTX)
MercadoLibre Inc
(MELI)

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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 May 1, 21 stocks saw their ratings change to 4 stars, while seven joined the 73 US-listed names in 5-star territory.

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

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

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 rose 0.9% over the past week as of May 1, leaving the overall US stock market moderately undervalued, hovering at a 6.0% discount to its fair value estimate on a market cap-weighted basis.

Of the 872 US-listed stocks covered by Morningstar analysts:

  • 38% are undervalued, 41% are fairly valued, and 21% are overvalued.
  • 21 are newly undervalued.
  • 12 are newly overvalued.
  • Seven moved from 4-star to 5-star ratings.
  • Six moved from 5-star to 4-star ratings.
  • None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
  • 12 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Alphabet

  • Morningstar Rating: ★★★★
  • Fair Value Estimate: $433.00
  • Uncertainty Rating: Medium

Internet content company Alphabet gained 11.99% over the past week. Alphabet has climbed 14.19% over the past three months and 139.94% over the past year. The stock’s fair value estimate rose to $433 per share from $340 during the week. It ended the week trading at an 11% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Alphabet is a large-core company with a wide economic moat.

Oracle

  • Morningstar Rating: ★★★★
  • Fair Value Estimate: $220.00
  • Uncertainty Rating: Very High

Following a 0.84% loss over the past week, software infrastructure firm Oracle saw its Morningstar Rating move to 4 stars from 3. Oracle has gained 4.78% over the past three months and 19.28% over the past year. The large-core stock has a narrow economic moat. Oracle is trading at a 22% discount to its fair value estimate of $220 per share, with an Uncertainty Rating of Very High.

RTX

  • Morningstar Rating: ★★★★
  • Fair Value Estimate: $200.00
  • Uncertainty Rating: Medium

Aerospace and defense company RTX dropped 0.15% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 13.12% over the past three months and is up 38.88% over the past year. The stock’s price is 13% below its fair value estimate of $200 per share, with an Uncertainty Rating of Medium. The large-value stock has a wide economic moat.

MercadoLibre

  • Morningstar Rating: ★★★★
  • Fair Value Estimate: $2,150.00
  • Uncertainty Rating: High

Internet retail company MercadoLibre gained 0.81% over the past week. MercadoLibre has dropped 13.86% over the past three months and 19.37% over the past year. The stock’s fair value estimate rose to $2,150 per share from $2,100 during the week. It ended the week trading at a 14% discount to its new fair value estimate, with an Uncertainty Rating of High. MercadoLibre is a large-growth company with a wide economic moat.

Bayerische Motoren Werke

  • Morningstar Rating: ★★★★
  • Fair Value Estimate: $40.00
  • Uncertainty Rating: Very High

Following a 1.32% loss over the past week, auto manufacturer Bayerische saw its Morningstar Rating move to 4 stars from 3. Bayerische has lost 11.36% over the past three months and has gained 12.92% over the past year. The large-value stock has no economic moat. Bayerische is trading at a 24% discount to its fair value estimate of $40 per share, with an Uncertainty Rating of Very High.

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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