2 Undervalued Stocks That Look Like Buys Today

On the Nov. 2, 2026, episode of The Morning Filter podcast, guest host Sarah Hansen and Morningstar Chief US Market Strategist Dave Sekera discuss why Crown Castle CCI and Applied Materials AMAT stocks look attractive today. Here is an excerpt from the show.

Why Crown Castle Looks Attractive With or Without SpaceX

Sarah Hansen: Great. And number three, moving on to Crown Castle, which is a REIT that owns and leases wireless cell towers. Walk us through the numbers there.

David Sekera: Crown Castle is a 4-star-rated stock, trades at a 22% discount, nice healthy dividend yield at 4.8%. We rate the company with a Medium Uncertainty. We assign it a narrow economic moat based on efficient scale and switching costs.

Hansen: Great. Let’s talk about why this is a buy. I have a suspicion that our recent chat about SpaceX and US telecoms might be coming into play here.

Sekera: Yeah. We also had some viewers send in some questions about how to be able to play the SpaceX SPCX potentially getting more and more involved in the wireless business. When I think about if SpaceX really does want to get into the wireless business, they’re buying spectrum. Well, if they’re going to use that spectrum, of course now they need to have the actual equipment in place to be able to use that spectrum. Of course, I think that if they were to do that, they would add a lot of further upside to Crown Castle that we don’t have currently modeled into our model. Now, I like the stock because it’s still undervalued even without getting any new business from SpaceX. The company owns 40,000 wireless towers in the US. They make their money by leasing space on those towers to the wireless service providers, who then install equipment to support their wireless networks.

I think this is one that if you really believe Elon is going to get into providing wireless, I think he would have to go to a Crown Castle. I think that provides a lot of upside. Even without that upside, it’s still just an attractively valued stock. When we look at the valuation here, because it’s a REIT and because of the type of business it’s in, our analyst team uses a valuation multiple. It’s enterprise value/EBITDA. Historically, the long-term median for this company has been 23 times. It’s currently at 21 times right now. So, looks attractive from a couple of different points of view.

Why Applied Materials Is a Buy After a 44% Drop

Hansen: OK. Thank you, Dave. Let’s move on to your buys. First up, we have Applied Materials, a semiconductor stock. Give us some of the key metrics there.

Sekera: Sure. Applied is a 4-star-rated stock, currently trades at a 25% discount from our valuation, only 0.5% dividend yield, so maybe not one if you’re a dividend-yield investor. Of course, High Uncertainty rating, but we are assigned a wide economic moat, that wide moat being based on cost advantages and intangible assets.

Hansen: OK. Now, Applied Materials was a sell recommendation just a few months ago. So what has changed to put it on your buy list?

Sekera: Yeah, it was a sell recommendation on the June 29, 2026 episode of The Morning Filter. We just noted at that point in time, I mean, as much as we have a very positive view on the company in and of itself, the stock just ran way too far, way too fast to the upside, and it’s now dropped 44% since then. Now we take the view that we think it’s fallen too much to the downside.

For those of you who aren’t familiar with the company, they are the largest semi-wafer fabrication equipment manufacturer in the world. As far as we can tell, industry demand is still very healthy across the board. When I take a look at our model, I think it seems pretty reasonable to me. We’re projecting revenue in 2027 to grow 30%, considering it’s already November, like you’re talking about. I think those orders, for the most part, for next year are already locked in, so it shouldn’t be that much risk to next year’s revenue.

Then from there, we expect revenue growth to start slowing in 2028 through 2030, taking down to 20%, 14%, and 10% respectively. It’s not like we’re looking for some big hockey-stick projection to the upside. And of course, the earnings kind of take that similar trajectory. We’re looking for 38% growth in earnings in 2027, then slowing to 28%, 18%, and 14%. I like that we are modeling that while you have good visibility here into 2027, we are bringing those down in the couple of years thereafter. Stock currently trades at 22 times our 2027 earnings estimate of 1765. I think it all looks pretty constructive.

Subscribe to The Morning Filter on Apple Podcasts, or wherever you get your podcasts, and keep up with the latest research from hosts Susan Dziubinski and David Sekera, and guest host Sarah Hansen, on Morningstar.com.