10 Newly Overvalued Stocks this Week
Novartis and Lloyds are among the stocks now rated as expensive.
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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly overvalued names—those whose prices have just climbed into ranges warranting 1- or 2-star
The five new 2-star stocks with the largest market capitalization are:
The four new 1-star stocks, ordered by market capitalization, are:
The full list of new 2-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
The Latest Stock Valuation Changes
The Morningstar US Market Index rose 1.68% over the past week as of July 2, leaving the overall US stock market moderately undervalued, hovering at a 7% discount to its fair value estimate on a market cap-weighted basis.
Of the 875 US-listed stocks covered by Morningstar analysts:
- 35% are undervalued, 41% are fairly valued, and 23% are overvalued.
- Four are newly undervalued.
- 10 are newly overvalued.
- Four moved from a 2-star rating to a 1-star rating.
- Five moved from a 1-star rating to a 2-star rating.
- None of the newly overvalued stocks jumped from a 3-star rating to a 1-star rating.
- Nine are no longer overvalued.
Metrics for This Week’s New 2-Star Stocks
Novartis NVS
- Morningstar Rating: ★★
- Fair Value Estimate: $140.00
- Uncertainty Rating: Medium
Following a 2.89% gain over the past week, drug manufacturer Novartis saw its Morningstar Rating move to 2 stars from 3. Novartis has gained 3.81% over the past three months and 35.16% over the past year. The large-core stock has a wide economic moat. Novartis is trading at a 14% premium to its fair value estimate of $140 per share, with an Uncertainty Rating of Medium.
Lloyds Banking Group LYG
- Morningstar Rating: ★★
- Fair Value Estimate: $5.35
- Uncertainty Rating: Medium
Regional bank Lloyds climbed 6.50% over the past week, bumping its Morningstar Rating to 2 stars from 3. The company’s stock is up 19.15% over the past three months and 51.46% over the past year. The stock’s price is 13% above its fair value estimate of $5.35 per share, with an Uncertainty Rating of Medium. The large-core stock has a narrow economic moat.
Colgate-Palmolive CL
- Morningstar Rating: ★★
- Fair Value Estimate: $88.00
- Uncertainty Rating: Low
Following a 3.32% gain over the past week, household and personal products company Colgate-Palmolive saw its Morningstar Rating move to 2 stars from 3. Colgate-Palmolive has gained 12.44% over the past three months and 5.12% over the past year. The mid-core stock has a wide economic moat. Colgate-Palmolive is trading at an 8% premium to its fair value estimate of $88 per share, with an Uncertainty Rating of Low.
Consolidated Edison ED
- Morningstar Rating: ★★
- Fair Value Estimate: $104.00
- Uncertainty Rating: Low
Regulated electric company Consolidated Edison climbed 1.72% over the past week, bumping its Morningstar Rating to 2 stars from 3. The company’s stock is down 0.42% over the past three months and is up 17.43% over the past year. The stock’s price is 10% above its fair value estimate of $104 per share, with an Uncertainty Rating of Low. The mid-value stock has no economic moat.
BioNTech BNTX
- Morningstar Rating: ★★
- Fair Value Estimate: $76.00
- Uncertainty Rating: Very High
Biotechnology firm BioNTech gained 6.93% over the past week, shifting its Morningstar Rating to 2 stars from 3. BioNTech has climbed 6.98% over the past three months and has dropped 11.32% over the past year. The stock is trading at a 28% premium to its fair value estimate of $76 per share, with an Uncertainty Rating of Very High. BioNTech has no economic moat.
Metrics for This Week’s New 1-Star Stocks
Honeywell HON
- Morningstar Rating: ★
- Fair Value Estimate: $164.00
- Uncertainty Rating: Medium
Conglomerate Honeywell climbed 0.90% over the past week. The company’s stock is up 2.69% over the past three months and 5.96% over the past year. The stock’s fair value estimate was cut to $164.00 per share from $208.24 during the week. It ended the week trading at a 40% premium to its new fair value estimate, with an Uncertainty Rating of Medium. The mid-core stock has a wide economic moat.
Allstate ALL
- Morningstar Rating: ★
- Fair Value Estimate: $176.00
- Uncertainty Rating: Medium
Property and casualty insurance firm Allstate gained 4.47% over the past week, shifting its Morningstar Rating to 1 star from 2. Allstate has climbed 21.55% over the past three months and 28.97% over the past year. The stock is trading at a 42% premium to its fair value estimate of $176 per share, with an Uncertainty Rating of Medium. Allstate is a mid-core company with no economic moat.
Guardant Health GH
- Morningstar Rating: ★
- Fair Value Estimate: $90.00
- Uncertainty Rating: Very High
Diagnostics and research firm Guardant climbed 12.57% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is up 79.03% over the past three months and 232.63% over the past year. The stock’s price is 87% above its fair value estimate of $90 per share, with an Uncertainty Rating of Very High. The mid-growth stock has no economic moat.
Nextpower NXT
- Morningstar Rating: ★
- Fair Value Estimate: $64.00
- Uncertainty Rating: Very High
Following a 5.51% gain over the past week, solar company Nextpower saw its Morningstar Rating move to 1 star from 2. Nextpower has lost 0.21% over the past three months and has gained 70.17% over the past year. The mid-growth stock has no economic moat. Nextpower is trading at a 76% premium to its fair value estimate of $64 per share, with an Uncertainty Rating of Very High.
This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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