26 New 4-Star Stocks This Week

Every Monday morning, get Morningstar’s insights on company news, the latest stock market trends, and in-depth company reports from our analysts. Sign up for our Stock Strategist newsletter here.

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 Oct. 2, 26 stocks saw their ratings change to 4 stars, while nine joined the 74 US-listed names in 5-star territory.

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

• Home Depot HD
• RTX RTX
• Anheuser-Busch BUD
• Unilever UL
• CME Group CME

The full list of new 4-star stocks is 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 fell 0.24% over the past week as of Oct. 2, leaving the overall US stock market moderately undervalued, hovering at a 7.00% discount to its fair value estimate on a market cap-weighted basis.

Of the 868 US-listed stocks covered by Morningstar analysts:

• 46% are undervalued, 36% are fairly valued, and 18% are overvalued.
• 26 are newly undervalued.
• Three are newly overvalued.
• Nine moved from a 4-star rating to a 5-star rating.
• One moved from a 5-star rating to a 4-star rating.
• None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
• Six are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Home Depot HD

• Morningstar Rating: ★★★★
• Fair Value Estimate: $325.00
• Uncertainty Rating: Medium

Home improvement retail company Home Depot dropped 3.53% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 20.39% over the past three months and 26.35% over the past year. The stock’s price is 13% below its fair value estimate of $325 per share, with an Uncertainty Rating of Medium. The large-value stock has a wide economic moat.

RTX RTX

• Morningstar Rating: ★★★★
• Fair Value Estimate: $214.00
• Uncertainty Rating: Medium

Following a 2.49% loss over the past week, aerospace and defense company RTX saw its Morningstar Rating move to 4 stars from 3. RTX has lost 7.01% over the past three months and has gained 12.47% over the past year. The large-value stock has a wide economic moat. RTX is trading at a 14% discount to its fair value estimate of $214 per share, with an Uncertainty Rating of Medium.

Anheuser-Busch BUD

• Morningstar Rating: ★★★★
• Fair Value Estimate: $85.00
• Uncertainty Rating: Medium

Alcoholic beverage company Anheuser-Busch lost 5.86% over the past week, shifting its Morningstar Rating to 4 stars from 3. Anheuser-Busch has dropped 9.71% over the past three months and has climbed 24.41% over the past year. The stock is trading at a 14% discount to its fair value estimate of $85 per share, with an Uncertainty Rating of Medium. Anheuser-Busch is a large-core company with a wide economic moat.

Unilever UL

• Morningstar Rating: ★★★★
• Fair Value Estimate: $70.00
• Uncertainty Rating: Medium

Household and personal products company Unilever dropped 4.54% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is down 3.64% over the past three months and 6.85% over the past year. The stock’s price is 15% below its fair value estimate of $70 per share, with an Uncertainty Rating of Medium. The large-core stock has a wide economic moat.

CME Group CME

• Morningstar Rating: ★★★★
• Fair Value Estimate: $285.00
• Uncertainty Rating: Low

Financial data firm CME lost 0.51% over the past week, shifting its Morningstar Rating to 4 stars from 3. CME has climbed 11.74% over the past three months and 3.02% over the past year. The stock is trading at an 8% discount to its fair value estimate of $285 per share, with an Uncertainty Rating of Low. CME is a mid-core company with a wide economic moat.