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Fair Value Estimate

What is a fair value estimate?

The fair value estimate is a Morningstar analyst’s estimate of a stock’s intrinsic value, or what a stock is worth in the long term. Morningstar analysts use a proprietary discounted cash flow model to determine a stock’s fair value estimate.

By applying the same bottom-up, long-term, fundamentally based approach across our global coverage, Morningstar enables investors to compare investment opportunities across industries and around the globe on an apples-to-apples basis.

The Morningstar Rating for stocks, or the star rating, shows how a stock’s market price compares with its fair value estimate.