5 New 5-Star Stocks This Week

Every Monday, 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 July 2, four stocks saw their ratings change to 4 stars, while five joined the 83 US-listed names in 5-star territory.

The five new 5-star stocks, ordered by market capitalization, are:

• Deutsche Telekom DTEGY
• Crown Castle International CCI
• Copart CPRT
• Dow DOW
• LyondellBasell Industries LYB

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 Market Index rose 1.68% over the past week as of July 2, leaving the overall US stock market moderately undervalued, hovering at a 7% discount to its fair value estimate on a market cap-weighted basis.

Of the 875 US-listed stocks covered by Morningstar analysts:

• 35% are undervalued, 41% are fairly valued, and 23% are overvalued.
• Four are newly undervalued.
• 10 are newly overvalued.
• Five moved from a 4-star rating to a 5-star rating.
• 14 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.
• 42 are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Deutsche Telekom DTEGY

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $44.00
• Uncertainty Rating: Medium

Following a 4.39% loss over the past week, telecom services firm Deutsche Telekom saw its Morningstar Rating move to 5 stars from 4. Deutsche Telekom has lost 19.39% over the past three months and 19.15% over the past year. The large-value stock has a narrow economic moat. Deutsche Telekom is trading at a 35% discount to its fair value estimate of $44 per share, with an Uncertainty Rating of Medium.

Crown Castle International CCI

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $117.00
• Uncertainty Rating: Medium

Specialty REIT Crown Castle dropped 7.29% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 8.57% over the past three months and 21.99% over the past year. The stock’s price is 35% below its fair value estimate of $117 per share, with an Uncertainty Rating of Medium. The mid-value stock has a narrow economic moat.

Copart CPRT

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $43.00
• Uncertainty Rating: Medium

Specialty business services firm Copart lost 1.77% over the past week, shifting its Morningstar Rating to 5 stars from 4. Copart has dropped 10.15% over the past three months and 39.15% over the past year. The stock is trading at a 30% discount to its fair value estimate of $43 per share, with an Uncertainty Rating of Medium. Copart is a mid-core company with a wide economic moat.

Dow DOW

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $48.00
• Uncertainty Rating: High

Following a 4.58% loss over the past week, chemical company Dow saw its Morningstar Rating move to 5 stars from 4. Dow has lost 32.37% over the past three months and has gained 2.39% over the past year. The mid-value stock has a narrow economic moat. Dow is trading at a 42% discount to its fair value estimate of $48 per share, with an Uncertainty Rating of High.

LyondellBasell Industries LYB

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $95.00
• Uncertainty Rating: High

Specialty chemicals company LyondellBasell lost 4.25% over the past week, shifting its Morningstar Rating to 5 stars from 4. LyondellBasell has dropped 32.28% over the past three months and 7.34% over the past year. The stock is trading at a 44% discount to its fair value estimate of $95 per share, with an Uncertainty Rating of High. LyondellBasell is a mid-value company with a narrow economic moat.