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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 June 12, nine stocks saw their ratings change to 4 stars, while 12 joined the 80 US-listed names in 5-star territory.
The five new 4-star stocks with the largest market capitalization are:
- Amazon AMZN
- Dell Technologies DELL
- Infosys INFY
- Guangzhou Xiaopeng Motors Technology XPEV
- Elanco Animal Health ELAN
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 0.79% over the past week as of June 12, leaving the overall US stock market moderately undervalued, hovering at an 8% discount to its fair value estimate on a market cap-weighted basis.
Of the 870 US-listed stocks covered by Morningstar analysts:
- 40% are undervalued, 37% are fairly valued, and 22% are overvalued.
- Nine are newly undervalued.
- 14 are newly overvalued.
- 12 moved from a 4-star rating to a 5-star rating.
- Two moved from a 5-star rating to a 4-star rating.
- Among the newly undervalued stocks, zero 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
Amazon AMZN
- Morningstar Rating: ★★★★
- Fair Value Estimate: $280
- Uncertainty Rating: Medium
Following a 3.04% loss over the past week, internet retail company Amazon saw its Morningstar Rating move to 4 stars from 3. Amazon has gained 13.85% over the past three months and 11.87% over the past year. The large-core stock has a wide economic moat. Amazon is trading at a 15% discount to its fair value estimate of $280, with an Uncertainty Rating of Medium.
Dell Technologies DELL
- Morningstar Rating: ★★★★
- Fair Value Estimate: $460
- Uncertainty Rating: High
Computer hardware company Dell Technologies climbed 0.30% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is up 164.65% over the past three months and 254.24% over the past year. The stock’s price is 14% below its fair value estimate of $460, with an Uncertainty Rating of High. The large-core stock has no economic moat.
Infosys INFY
- Morningstar Rating: ★★★★
- Fair Value Estimate: $14.10
- Uncertainty Rating: Medium
Information technology services company Infosys lost 3.24% over the past week, shifting its Morningstar Rating to 4 stars from 3. Infosys has dropped 10.73% over the past three months and 34.37% over the past year. The stock is trading at a 17% discount to its fair value estimate of $14.10, with an Uncertainty Rating of Medium. Infosys is a large-value company with a narrow economic moat.
Guangzhou Xiaopeng Motors Technology XPEV
- Morningstar Rating: ★★★★
- Fair Value Estimate: $19
- Uncertainty Rating: Very High
Auto manufacturer Guangzhou Xiaopeng Motors Technology dropped 9.15% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 27.48% over the past three months and 24.65% over the past year. The stock’s price is 24% below its fair value estimate of $19, with an Uncertainty Rating of Very High. The large-value stock has no economic moat.
Elanco Animal Health ELAN
- Morningstar Rating: ★★★★
- Fair Value Estimate: $28
- Uncertainty Rating: High
Following a 2.29% gain over the past week, drug manufacturer Elanco Animal Health saw its Morningstar Rating move to 4 stars from 3. Elanco Animal Health has gained 6.57% over the past three months and 70.57% over the past year. The small-core stock has no economic moat. Elanco Animal Health is trading at a 14% discount to its fair value estimate of $28, with an Uncertainty Rating of High.
This article was generated with the help of automation and reviewed by Morningstar editors.
Learn more about Morningstar’s use of automation.
