25 Newly Overvalued Stocks This Week
MasterCard and Palantir are among the stocks now rated as expensive.
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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly overvalued names—those whose prices have just climbed into ranges warranting 1- or 2-star Morningstar Ratings. For the week ended Oct. 23, 24 stocks saw their ratings change to 2 stars, while six joined the 30 US-listed names in 1-star territory.
The five new 2-star stocks with the largest market capitalization are:
The five new 1-star stocks with the largest market capitalization are:
- Marriott International MAR
- Mettler Toledo MTD
- Church & Dwight CHD
- Paycom PAYC
- American Airlines Group AAL
The full lists of new 2- and 1-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.
- Five moved from a 2-star rating to a 1-star rating.
- Five moved from a 1-star rating to a 2-star rating.
- One newly overvalued stock jumped from a 3-star rating to a 1-star rating.
- Seven are no longer overvalued.
Metrics for This Week’s New 2-Star Stocks
MasterCard MA
- Morningstar Rating: ★★
- Fair Value: $550.00
- Uncertainty Rating: Medium
Following a 1% gain over the past week, credit services firm MasterCard saw its Morningstar Rating move to 2 stars from 3. MasterCard has gained 17.77% over the past three months and 9.38% over the past year. The large-core stock has a wide economic moat. MasterCard is trading at a 13% premium to its fair value estimate of $550 per share, with an Uncertainty Rating of Medium.
Palantir Technologies PLTR
- Morningstar Rating: ★★
- Fair Value: $153.00
- Uncertainty Rating: Very High
Software infrastructure firm Palantir gained 5.76% over the past week, shifting its Morningstar Rating to 2 stars from 3. Palantir has climbed 59.48% over the past three months and 9.01% over the past year. The stock is trading at a 29% premium to its fair value estimate of $153 per share, with an Uncertainty Rating of Very High. Palantir is a large-growth company with a narrow economic moat.
ConocoPhillips COP
- Morningstar Rating: ★★
- Fair Value: $126.00
- Uncertainty Rating: High
Following a 2.93% gain over the past week, oil and gas exploration and production company ConocoPhillips saw its Morningstar Rating move to 2 stars from 3. ConocoPhillips has gained 26.28% over the past three months and 72.64% over the past year. The large-value stock has a narrow economic moat. ConocoPhillips is trading at a 20% premium to its fair value estimate of $126 per share, with an Uncertainty Rating of High.
Intuitive ISRG
- Morningstar Rating: ★★
- Fair Value: $378.00
- Uncertainty Rating: High
Medical supplies company Intuitive climbed 6.00% over the past week, bumping its Morningstar Rating to 2 stars from 3. The company’s stock is up 36.22% over the past three months and is down 17.96% over the past year. The stock’s price is 20% above its fair value estimate of $378 per share, with an Uncertainty Rating of High. The large-core stock has a wide economic moat.
Vertex Pharmaceuticals VRTX
- Morningstar Rating: ★★
- Fair Value: $450.00
- Uncertainty Rating: High
Biotechnology firm Vertex gained 4.84% over the past week, shifting its Morningstar Rating to 2 stars from 3. Vertex has climbed 10.75% over the past three months and 23.97% over the past year. The stock is trading at a 16% premium to its fair value estimate of $450 per share, with an Uncertainty Rating of High. Vertex is a large-core company with a narrow economic moat.
Metrics for This Week’s New 1-Star Stocks
Marriott International MAR
- Morningstar Rating: ★
- Fair Value: $286.00
- Uncertainty Rating: Medium
Lodging company Marriott climbed 0.69% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is up 7.42% over the past three months and 46.08% over the past year. The stock’s price is 37% above its fair value estimate of $286 per share, with an Uncertainty Rating of Medium. The mid-core stock has a wide economic moat.
Mettler Toledo MTD
- Morningstar Rating: ★
- Fair Value: $1,200.00
- Uncertainty Rating: Medium
Following a 2.96% gain over the past week, diagnostics and research firm Mettler Toledo saw its Morningstar Rating move to 1 star from 2. Mettler Toledo has gained 25.41% over the past three months and 16.17% over the past year. The mid-core stock has a narrow economic moat. Mettler Toledo is trading at a 39% premium to its fair value estimate of $1,200 per share, with an Uncertainty Rating of Medium.
Church & Dwight CHD
- Morningstar Rating: ★
- Fair Value: $78.00
- Uncertainty Rating: Medium
Household and personal products company Church & Dwight climbed 0.63% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is up 9.69% over the past three months and 22.88% over the past year. The stock’s price is 35% above its fair value estimate of $78 per share, with an Uncertainty Rating of Medium. The mid-core stock has no economic moat.
Paycom PAYC
- Morningstar Rating: ★
- Fair Value: $170.00
- Uncertainty Rating: High
Following a 9.12% gain over the past week, software application firm Paycom saw its Morningstar Rating move to 1 star from 2. Paycom has gained 98.30% over the past three months and 38.43% over the past year. The small-core stock has no economic moat. Paycom is trading at a 62% premium to its fair value estimate of $170 per share, with an Uncertainty Rating of High.
American Airlines Group AAL
- Morningstar Rating: ★
- Fair Value: $6.10
- Uncertainty Rating: Very High
American Airlines climbed 1.94% over the past week. The stock is down 10.66% over the past three months and 5.17% over the past year. The stock’s fair value estimate was cut to $6.10 per share from $10.30 during the week. It ended the week trading at a 99% premium to its new fair value estimate, with an Uncertainty Rating of Very High. The small-core stock has no 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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