14 New 4-Star Stocks

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Each week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names.

For the week ended Dec. 13, 14 stocks saw their Morningstar Ratings change to 4 stars, while one dropped into 5-star territory. Stocks rated 3 stars are fairly valued according to Morningstar analysts, while those rated 1 or 2 stars are considered overvalued.

The five new 4-star stocks with the largest market capitalization are:

• Advanced Micro Devices AMD
• Caterpillar CAT
• GE Aerospace GE
• Uber UBER
• Kenvue KVUE

The new 5-star stock is:

• Under Armour UA

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.

Newly Undervalued Stocks for the Week Ended Dec. 13

The Morningstar US Market Index fell 0.83% over the past week, leaving the overall US stock market significantly overvalued, hovering at an 11% premium to its fair value estimate on a cap-weighted basis.

Of the 877 US-listed stocks covered by Morningstar analysts:

• 32% are undervalued, 38% are fairly valued, and 30% are overvalued.
• 14 are newly undervalued.
• Two are newly overvalued.
• One moved from a 4-star rating to a 5-star rating.
• Seven moved from a 5-star rating to a 4-star rating.
• Among the newly undervalued stocks, none jumped from a 3-star rating to a 5-star rating.
• Five are no longer undervalued.

Morningstar analysts assign every stock under their coverage a fair value estimate, which is an intrinsic measure of the stock’s worth, and an Uncertainty Rating, which captures the range of potential outcomes for that estimate. A higher rating equates to a larger range. These two metrics and the stock’s current price determine its Morningstar Rating.

Metrics for this Week’s New 4-Star Stocks

Advanced Micro Devices

• Morningstar Rating: 4 stars
• One-Week Return: -8.43%

Semiconductor company Advanced Micro Devices is down 16.68% over the past three months and 8.16% over the past year. The stock’s price is 21% below its fair value estimate of $160, with an Uncertainty Rating of High. The large-growth stock has a narrow economic moat.

Caterpillar

• Morningstar Rating: 4 stars
• One-Week Return: -3.68%

Heavy machinery company Caterpillar has gained 10.59% over the past three months and 44.27% over the past year. The large-value stock has a wide economic moat. The fair value estimate for Caterpillar rose to $425 from $267 during the week. It ended the week trading at a 10% discount to its new fair value estimate, with an Uncertainty Rating of Medium.

GE Aerospace

• Morningstar Rating: 4 stars
• One-Week Return: -5.45%

Aerospace and defense company GE Aerospace has dropped 6.74% over the past three months and climbed 77.04% over the past year. The stock is trading at a 14% discount to its fair value estimate of $194, with an Uncertainty Rating of Medium. GE Aerospace is a large-growth company with a wide economic moat.

Uber

• Morningstar Rating: 4 stars
• One-Week Return: -9.32%

Software application firm Uber is down 17.32% over the past three months and 3.29% over the past year. The stock’s price is 25% below its fair value estimate of $80, with an Uncertainty Rating of Very High. The large-growth stock has a narrow economic moat.

Kenvue

• Morningstar Rating: 4 stars
• One-Week Return: -2.76%

Household and personal products company Kenvue has dropped 4.20% over the past three months and climbed 9.73% over the past year. The stock is trading at a 15% discount to its fair value estimate of $26, with an Uncertainty Rating of Medium. Kenvue is a mid-core company with a wide economic moat.

Metrics for this Week’s New 5-Star Stock

Under Armour

• Morningstar Rating: 5 stars
• One-Week Return: -11.60%

Apparel manufacturing company Under Armour has gained 10.50% over the past three months and lost 2.20% over the past year. The small-core stock has no economic moat. Under Armour is trading at a 45% discount to its fair value estimate of $14.50, with an Uncertainty Rating of High.