Morningstar Price to Fair Value Chart

The Morningstar signature Price to Fair Value chart is designed to help investors assess a company’s shares using three key elements of our investment research.

First, the Economic Moat Rating evaluates a company’s sustainable competitive advantage. A wide-moat company has a high level of competitive advantage, a narrow-moat company has some competitive advantage, and a no-moat company has no sustainable competitive advantage.

Next, Morningstar calculates the Fair Value estimate based on how much cash we think the company will generate in the future. This long-term, intrinsic value estimate contrasts with the more volatile, market price.

The future is not certain, so Morningstar assigns a Fair Value Uncertainty rating to account for possible scenarios affecting a company’s future cash flows. The uncertainty rating appears as the thickness of a range of bands.

A superscript Q denotes a value that was determined by a quantitative model that estimates the value a Morningstar analyst would likely assign to the company.

Taken together, these elements provide investors not only with an up-to-date snapshot, but as Morningstar compares market prices to the Fair Value every day, we assemble a detailed, long-term perspective on our ratings and movements of the company’s share price.