7 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 Morningstar Ratings. For the week ended Jan. 23, seven stocks saw their ratings change to 4 stars, while three joined the 49 US-listed names in 5-star territory

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

• Block XYZ
• Agilent Technologies A
• Adidas ADDYY
• Hewlett Packard Enterprise HPE
• Check Point Software Technologies CHKP

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 fell 0.4% over the past week as of Jan. 23, leaving the overall US stock market slightly undervalued, hovering at a 4.0% discount to its fair value estimate on a market cap-weighted basis.

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

• 33% are undervalued, 41% are fairly valued, and 26% are overvalued.
• Seven are newly undervalued.
• 14 are newly overvalued.
• Three moved from a 4-star rating to a 5-star rating.
• Four 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.
• 12 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Block

• Morningstar Rating: ★★★★
• Fair Value Estimate: $83.00
• Uncertainty Rating: Very High

Software infrastructure firm Block gained 1.33% over the past week, shifting its Morningstar Rating to 4 stars from 3. Block has dropped 14.93% over the past three months and 23.88% over the past year. The stock is trading at a 19% discount to its fair value estimate of $83 per share, with an Uncertainty Rating of Very High. Block is a mid-growth company with a narrow economic moat.

Agilent Technologies

• Morningstar Rating: ★★★★
• Fair Value Estimate: $159.00
• Uncertainty Rating: Medium

Diagnostics and research firm Agilent dropped 3.29% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 8.26% over the past three months and 10.71% over the past year. The stock’s price is 15% below its fair value estimate of $159 per share, with an Uncertainty Rating of Medium. The mid-core stock has a wide economic moat.

Adidas

• Morningstar Rating: ★★★★
• Fair Value Estimate: $107.00
• Uncertainty Rating: Medium

Accessory firm Adidas lost 8.69% over the past week, shifting its Morningstar Rating to 4 stars from 3. Adidas has dropped 23.07% over the past three months and 36.56% over the past year. The stock is trading at a 21% discount to its fair value estimate of $107 per share, with an Uncertainty Rating of Medium. Adidas is a large-core company with a narrow economic moat.

Hewlett Packard Enterprise

• Morningstar Rating: ★★★★
• Fair Value Estimate: $26.00
• Uncertainty Rating: High

Following a 1.82% loss over the past week, communication equipment firm Hewlett Packard saw its Morningstar Rating move to 4 stars from 3. Hewlett Packard has lost 8.70% over the past three months and 11.28% over the past year. The mid-value stock has no economic moat. Hewlett Packard is trading at a 19% discount to its fair value estimate of $26 per share, with an Uncertainty Rating of High.

Check Point Software Technologies

• Morningstar Rating: ★★★★
• Fair Value Estimate: $201
• Uncertainty Rating: Medium

Software infrastructure firm Check Point Software Technologies Ltd lost 2.32% over the past week, shifting its Morningstar Rating to 4 stars from 3. Check Point has dropped 6.37% over the past three months and 7.71% over the past year. The stock is trading at a 10% discount to its fair value estimate of $201 per share, with an Uncertainty Rating of Medium. Check Point is a large-core company with a narrow economic moat.