The Morningstar Rating for Stocks

The Morningstar Rating for stocks can help investors uncover stocks that are truly undervalued, cutting through the market noise.

The rating is determined by three factors: a stock's current price, Morningstar's estimate of the stock's fair value, and the uncertainty rating of the fair value. The bigger the discount, the higher the star rating. Four- and 5-star ratings mean the stock is undervalued, while a 3-star rating means it's fairly valued, and 1- and 2-star stocks are overvalued. When looking for investments, a 5-star stock is generally a better opportunity than a 1-star stock. 

Investors can use the Morningstar Rating for stocks to evaluate a stock's true value.