20 New 4-Star Stocks This Week
Meta and GE Aerospace are among the stocks that fell into undervalued territory.
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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star Morningstar Ratings. For the week ended Oct. 23, 20 stocks saw their ratings change to 4 stars, while three joined the 68 US-listed names in 5-star territory.
The five new 4-star stocks with the largest market capitalization are:
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.
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 fair value estimate—Morningstar’s estimate of its intrinsic worth—and its Uncertainty Rating, which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.
The Latest Stock Valuation Changes
The Morningstar US Total Market Index fell 0.27% over the past week as of Oct. 23, leaving the overall US stock market moderately undervalued, hovering at a 9% discount to its fair value estimate on a market cap-weighted basis.
Of the 872 US-listed stocks covered by Morningstar analysts:
- 42% are undervalued, 40% are fairly valued, and 19% are overvalued.
- 20 are newly undervalued.
- 25 are newly overvalued.
- Three moved from a 4-star rating to a 5-star rating.
- 10 moved from a 5-star rating to a 4-star rating.
- No newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
- 31 are no longer undervalued.
Metrics for This Week’s New 4-Star Stocks
Meta Platforms META
- Morningstar Rating: ★★★★
- Fair Value: $850.00
- Uncertainty Rating: High
Internet content company Meta dropped 9.40% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is up 6.10% over the past three months and is down 12.17% over the past year. The stock’s price is 24% below its fair value estimate of $850 per share, with an Uncertainty Rating of High. The large-core stock has a wide economic moat.
GE Aerospace GE
- Morningstar Rating: ★★★★
- Fair Value: $350.00
- Uncertainty Rating: Medium
Aerospace and defense company GE Aerospace lost 8.98% over the past week. GE Aerospace has dropped 18.03% over the past three months and 6.27% over the past year. The stock’s fair value estimate rose to $350 per share from $347 during the week. It ended the week trading at an 18% discount to its new fair value estimate, with an Uncertainty Rating of Medium. GE Aerospace is a large-core company with a wide economic moat.
Lam Research LRCX
- Morningstar Rating: ★★★★
- Fair Value: $310.00
- Uncertainty Rating: High
Following a 12.82% loss over the past week, semiconductor equipment and materials firm Lam saw its Morningstar Rating move to 4 stars from 3. Lam has lost 27.97% over the past three months and has gained 56.67% over the past year. The large-growth stock has a wide economic moat. Lam is trading at a 26% discount to its fair value estimate of $310 per share, with an Uncertainty Rating of High.
Netflix NFLX
- Morningstar Rating: ★★★★
- Fair Value: $80.00
- Uncertainty Rating: High
Entertainment company Netflix lost 6.64% over the past week, shifting its Morningstar Rating to 4 stars from 3. Netflix has dropped 4.41% over the past three months and 40.87% over the past year. The stock is trading at an 18% discount to its fair value estimate of $80 per share, with an Uncertainty Rating of High. Netflix is a large-core company with a narrow economic moat.
AT&T T
- Morningstar Rating: ★★★★
- Fair Value: $26.00
- Uncertainty Rating: High
Telecom services firm AT&T dropped 10.71% over the past week. The company’s stock is down 7.70% over the past three months and 10.85% over the past year. The stock’s fair value estimate was cut to $26 per share from $27 during the week. It ended the week trading at a 19% discount to its new fair value estimate, with an Uncertainty Rating of High. The large-value stock has a narrow economic moat.
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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