20 Newly Overvalued Stocks
S&P Global and Marriott are among the stocks that are now expensive.
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Each week, we screen the US-listed stocks under Morningstar’s coverage for newly overvalued names. For the week ended Jan. 31, 20 stocks saw their Morningstar Ratings change to 2 stars, while none climbed into 1-star territory. Stocks rated 3 stars are fairly valued according to Morningstar analysts, while those rated 4 or 5 stars are considered undervalued.
The five new 2-star stocks with the largest 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.
Newly Overvalued Stocks for the Week Ended Jan. 31
The Morningstar US Market Index fell 0.89% over the past week, leaving the overall US stock market moderately overvalued, hovering at an 8% premium to its fair value estimate on a cap-weighted basis.
Of the 858 US-listed stocks covered by Morningstar analysts:
- 34% are undervalued, 38% are fairly valued, and 28% are overvalued.
- 20 are newly overvalued.
- Eight are newly undervalued.
- None moved from a 2-star rating to a 1-star rating.
- None of the newly overvalued stocks jumped from a 3-star rating to a 1-star rating.
- 16 are no longer overvalued.
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 Uncertainty Rating equates to a larger range of prices considered fairly valued. These two metrics and the stock’s current price determine its Morningstar Rating.
Distribution of Star Ratings for US-Listed Stocks
Metrics for this Week’s New 2-Star Stocks
S&P Global
- Morningstar Rating: 2 stars
- One-Week Return: 1.49%
Financial data firm S&P has climbed 8.73% over the past three months and 17.20% over the past year. The stock is trading at a 9% premium to its fair value estimate of $480 per share, with an Uncertainty Rating of Low. S&P is a large-core company with a wide economic moat.
Marriott International
- Morningstar Rating: 2 stars
- One-Week Return: 2.28%
Lodging company Marriott has gained 12.01% over the past three months and 22.42% over the past year. The large-core stock has a wide economic moat. Marriott is trading at a 15% premium to its fair value estimate of $253 per share, with an Uncertainty Rating of Medium.
McKesson
- Morningstar Rating: 2 stars
- One-Week Return: 0.54%
Medical distributor McKesson is up 18.95% over the past three months and 19.53% over the past year. The stock’s price is 12% above its fair value estimate of $530 per share, with an Uncertainty Rating of Medium. The large-value stock has a narrow economic moat.
Ecolab
- Morningstar Rating: 2 stars
- One-Week Return: 3.36%
Specialty chemicals company Ecolab has gained 2.08% over the past three months and 27.45% over the past year. The mid-growth stock has a wide economic moat. Ecolab is trading at a 16% premium to its fair value estimate of $215 per share, with an Uncertainty Rating of Medium.
KDDI
- Morningstar Rating: 2 stars
- One-Week Return: 6.01%
Telecom services firm KDDI has climbed 6.62% over the past three months and 3.60% over the past year. The stock is trading at an 8% premium to its fair value estimate of $15.30 per share, with an Uncertainty Rating of Low. KDDI is a large-value company with 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.
United States