6 New 4-Star Stocks

Every Monday, get Morningstar’s insights on company news, the latest stock market trends, and in-depth reports from our analysts. Sign up for our Stock Strategist newsletter here.

Each week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names.

For the week ended Nov. 22, six stocks saw their Morningstar Ratings change to 4 stars, while one dropped into 5-star territory. Stocks rated 3 stars are fairly valued according to Morningstar analysts, while those rated 1 or 2 stars are considered overvalued.

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

• Siemens SIEGY
• Target TGT
• Equifax EFX
• Akamai Technologies AKAM
• AES AES

The new 5-star stock is:

• STMicroelectronics STM

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.

Newly Undervalued Stocks for the Week Ended Nov. 22

The Morningstar US Market Index rose 2.11% over the past week, leaving the overall US stock market moderately overvalued, hovering at a 9% premium to its fair value estimate on a cap-weighted basis.

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

• 32% are undervalued, 38% are fairly valued, and 29% are overvalued.
• Six are newly undervalued.
• 19 are newly overvalued.
• One moved from a 4-star rating to a 5-star rating.
• One moved from a 5-star rating to a 4-star rating.
• None of the newly undervalued names went from a 3-star rating to a 5-star rating.
• Six are no longer undervalued.

Morningstar analysts assign every stock under their coverage a fair value estimate, which is an intrinsic measure of the stock’s worth, and an Uncertainty Rating, which captures the range of potential outcomes for that estimate. A higher Uncertainty Rating equates to a larger range of prices considered fairly valued. These two metrics and the stock’s current price are used to determine its Morningstar Rating.

Metrics for this Week’s New 4-Star Stocks

Siemens

• Morningstar Rating: 4 stars
• One-Week Return: -6.16%

Specialty industrial machinery firm Siemens is up 1.35% over the past three months and 17.18% over the past year. The stock’s price is 14% below its fair value estimate of $108, with an Uncertainty Rating of Medium. The large-core stock has a wide economic moat.

Target

• Morningstar Rating: 4 stars
• One-Week Return: -17.07%

Discount store Target has dropped 19.55% over the past three months and 1.25% over the past year. The stock is trading at an 11% discount to its fair value estimate of $140, with an Uncertainty Rating of Medium. Target is a large-value company with no economic moat.

Equifax

• Morningstar Rating: 4 stars
• One-Week Return: 2.3%

Consulting firm Equifax is down 14.22% over the past three months and up 21.16% over the past year. The stock’s price is 11% below its fair value estimate of $285, with an Uncertainty Rating of Medium. The mid-growth stock has a wide economic moat.

Akamai Technologies

• Morningstar Rating: 4 stars
• One-Week Return: 6.26%

Software infrastructure firm Akamai Technologies has lost 8.54% over the past three months and 18.20% over the past year. The mid-core stock has no economic moat. Akamai Technologies is trading at a 7% discount to its fair value estimate of $100, with an Uncertainty Rating of Medium.

AES

• Morningstar Rating: 4 stars
• One-Week Return: -6.66%

Utilities company AES is down 25.76% over the past three months and 19.65% over the past year. The stock’s price is 19% below its fair value estimate of $16, with an Uncertainty Rating of High. The mid-value stock has no economic moat.

Metrics for this Week’s New 5-Star Stock

STMicroelectronics

• Morningstar Rating: 5 stars
• One-Week Return: -3.13%

Semiconductor company STMicroelectronics is down 19.72% over the past three months and 45.50% over the past year. The stock’s price is 44% below its fair value estimate of $44, with an Uncertainty Rating of High. The large-value stock has a narrow economic moat.