5 New 5-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 Sept. 4, 11 stocks saw their ratings change to 4 stars, while five joined the 45 US-listed names in 5-star territory.

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

• PG&E PCG
• Edison International EIX
• Aurora Innovation AUR
• Pentair PNR
• PVH PVH

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 0.11% over the past week as of Sept. 4, 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 880 US-listed stocks covered by Morningstar analysts:

• 33% are undervalued, 46% are fairly valued, and 21% are overvalued.
• 11 are newly undervalued.
• Four are newly overvalued.
• Five moved from a 4-star rating to a 5-star rating.
• Five 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.
• 13 are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

PG&E PCG

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $20.50
• Uncertainty Rating: Medium

Regulated electric company PG&E dropped 13.86% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 14.73% over the past three months and 5.11% over the past year. The stock’s price is 30% below its fair value estimate of $20.50 per share, with an Uncertainty Rating of Medium. The mid-value stock has no economic moat.

Edison International EIX

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $81.00
• Uncertainty Rating: Medium

Regulated electric company Edison lost 19.10% over the past week, shifting its Morningstar Rating to 5 stars from 4. Edison has dropped 20.03% over the past three months and has climbed 9.57% over the past year. The stock is trading at a 30% discount to its fair value estimate of $81 per share, with an Uncertainty Rating of Medium. Edison is a mid-value company with a narrow economic moat.

Aurora Innovation AUR

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $12.00
• Uncertainty Rating: Very High

Auto parts firm Aurora climbed 8.75% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 7.31% over the past three months and is up 13.42% over the past year. The stock’s price is 47% below its fair value estimate of $12 per share, with an Uncertainty Rating of Very High. The small-growth stock has no economic moat.

Pentair PNR

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $91.00
• Uncertainty Rating: Medium

Following a 2.37% loss over the past week, specialty industrial machinery firm Pentair saw its Morningstar Rating move to 5 stars from 4. Pentair has lost 17.00% over the past three months and 44.63% over the past year. The small-value stock has a narrow economic moat. Pentair is trading at a 34% discount to its fair value estimate of $91 per share, with an Uncertainty Rating of Medium.

PVH PVH

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $128.00
• Uncertainty Rating: High

Apparel manufacturing company PVH dropped 1.88% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 4.85% over the past three months and 16.63% over the past year. The stock’s price is 42% below its fair value estimate of $128 per share, with an Uncertainty Rating of High. The small-value stock has no economic moat.