21 New 4-Star Stocks This Week

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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

. For the week ended Aug. 7, 21 stocks saw their ratings change to 4 stars, while one stock joined the 51 US-listed names in 5-star territory.

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

• AstraZeneca AZN
• Arista Networks ANET
• AppLovin APP
• TransDigm Group TDG
• WW Grainger GWW

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

—Morningstar’s estimate of its intrinsic worth—and its , 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 rose 3.7% over the past week as of Aug. 7, leaving the overall US stock market moderately undervalued, hovering at a 5.0% discount to its fair value estimate on a market-cap-weighted basis.

Of the 879 US-listed stocks covered by Morningstar analysts:

• 34% are undervalued, 42% are fairly valued, and 23% are overvalued.
• 21 are newly undervalued.
• 28 are newly overvalued.
• Two 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.
• 14 are no longer overvalued.

Metrics for This Week’s New 4-Star Stocks

AstraZeneca AZN

• Morningstar Rating: ★★★★
• Fair Value Estimate: $184.00
• Uncertainty Rating: Medium

Following a 4.21% loss over the past week, drug manufacturer AstraZeneca saw its Morningstar Rating move to 4 stars from 3. AstraZeneca has lost 10.97% over the past three months and has gained 11.53% over the past year. The large-core stock has a wide economic moat. AstraZeneca is trading at a 12% discount to its fair value estimate of $184 per share, with an Uncertainty Rating of Medium.

Arista Networks ANET

• Morningstar Rating: ★★★★
• Fair Value Estimate: $230.00
• Uncertainty Rating: High

Computer hardware company Arista gained 4.61% over the past week. Arista has climbed 33.10% over the past three months and 35.46% over the past year. The stock’s fair value estimate rose to $230 per share from $190 during the week. It ended the week trading at an 18% discount to its new fair value estimate, with an Uncertainty Rating of High. Arista is a large-growth company with a wide economic moat.

AppLovin APP

• Morningstar Rating: ★★★★
• Fair Value Estimate: $470.00
• Uncertainty Rating: Very High

Advertising agency AppLovin dropped 12.40% over the past week. The company’s stock is down 30.48% over the past three months and 20.70% over the past year. The stock’s fair value estimate was cut to $470 per share from $500 during the week. It ended the week trading at a 26% discount to its new fair value estimate, with an Uncertainty Rating of Very High. The large-growth stock has a narrow economic moat.

TransDigm Group TDG

• Morningstar Rating: ★★★★
• Fair Value Estimate: $1,500.00
• Uncertainty Rating: Medium

Aerospace and defense company TransDigm lost 2.32% over the past week. TransDigm has dropped 1.35% over the past three months and 8.35% over the past year. The stock’s fair value estimate rose to $1,500 per share from $1,400 during the week. It ended the week trading at an 18% discount to its new fair value estimate, with an Uncertainty Rating of Medium. TransDigm is a mid-growth company with a wide economic moat.

WW Grainger GWW

• Morningstar Rating: ★★★★
• Fair Value Estimate: $1,440.00
• Uncertainty Rating: Medium

Industrial distributor WW Grainger dropped 7.57% over the past week. The company’s stock is up 3.73% over the past three months and 36.73% over the past year. The stock’s fair value estimate rose to $1,440 per share from $1,340 during the week. It ended the week trading at an 11% discount to its new fair value estimate, with an Uncertainty Rating of Medium. The mid-core stock has a wide economic moat.