9 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 just fallen into ranges worthy of 4- or 5-star

. For the week ended April 17, nine stocks saw their ratings change to 4 stars, while none joined the 68 US-listed names in 5-star territory

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

• Abbott ABT
• US Bancorp USB
• Compass Group CMPGY
• Hershey HSY
• Imperial Brands IMBBY

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 rose 4.64% over the past week as of April 17, leaving the overall US stock market moderately undervalued, hovering at a 5% discount to its fair value estimate on a market cap-weighted basis.

Of the 830 US-listed stocks covered by Morningstar analysts:

• 38% are undervalued, 40% are fairly valued, and 22% are overvalued.
• Nine are newly undervalued.
• 30 are newly overvalued.
• Zero moved from a 4-star rating to a 5-star rating.
• 10 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.
• 41 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Abbott

• Morningstar Rating: ★★★★
• Fair Value Estimate: $115.00
• Uncertainty Rating: Medium

Following a 2.88% loss over the past week, medical device company Abbott saw its Morningstar Rating move to 4 stars from 3. Abbott has lost 20.00% over the past three months and 24.57% over the past year. The large-value stock has a narrow economic moat. Abbott is trading at a 16% discount to its fair value estimate of $115 per share, with an Uncertainty Rating of Medium.

US Bancorp

• Morningstar Rating: ★★★★
• Fair Value Estimate: $63.00
• Uncertainty Rating: Medium

Regional bank US Bancorp climbed 2.28% over the past week. The company’s stock is up 5.70% over the past three months and 55.32% over the past year. The stock’s fair value estimate rose to $63 per share from $59 during the week. It ended the week trading at a 10% discount to its new fair value estimate, with an Uncertainty Rating of Medium. The large-value stock has a wide economic moat.

Compass Group

• Morningstar Rating: ★★★★
• Fair Value Estimate: $31.50
• Uncertainty Rating: Medium

Restaurant firm Compass gained 3.12% over the past week, shifting its Morningstar Rating to 4 stars from 3. Compass has dropped 7.28% over the past three months and 14.67% over the past year. The stock is trading at a 10% discount to its fair value estimate of $31.50 per share, with an Uncertainty Rating of Medium. Compass is a large-core company with a narrow economic moat.

Hershey

• Morningstar Rating: ★★★★
• Fair Value Estimate: $218
• Uncertainty Rating: Low

Following a 4.78% loss over the past week, confectioner Hershey saw its Morningstar Rating move to 4 stars from 3. Hershey has lost 1.95% over the past three months and has gained 19.21% over the past year. The mid-core stock has a wide economic moat. Hershey is trading at a 12% discount to its fair value estimate of $218 per share, with an Uncertainty Rating of Low.

Imperial Brands

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

Tobacco company Imperial dropped 8.44% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 5.56% over the past three months and is up 1.45% over the past year. The stock’s price is 14% below its fair value estimate of $44 per share, with an Uncertainty Rating of Medium. The large-value stock has a wide economic moat.