9 Newly Overvalued Stocks This Week
Regeneron and Cheniere 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. 30, nine stocks saw their ratings change to 2 stars, while five joined the 30 US-listed names in 1-star territory.
The five new 2-star stocks with the largest market capitalization are:
- Regeneron Pharmaceuticals REGN
- Cheniere Energy LNG
- State Street STT
- Vulcan Materials VMC
- Cheniere Energy CQP
The five new 1-star stocks, ordered by market capitalization, are:
The full list of new 2-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 0.41% over the past week as of Oct. 30, leaving the overall US stock market moderately undervalued, hovering at a 10% discount to its fair value estimate on a market cap-weighted basis.
Of the 875 US-listed stocks covered by Morningstar analysts:
- 42% are undervalued, 40% are fairly valued, and 18% are overvalued.
- 24 are newly undervalued.
- Nine are newly overvalued.
- Five moved from a 2-star rating to a 1-star rating.
- Four moved from a 1-star rating to a 2-star rating.
- No newly overvalued stocks jumped from a 3-star rating to a 1-star rating.
- 12 are no longer overvalued.
Metrics for This Week’s New 2-Star Stocks
Regeneron Pharmaceuticals REGN
- Morningstar Rating: ★★
- Fair Value: $730.00
- Uncertainty Rating: Medium
Following a 15.26% gain over the past week, biotechnology firm Regeneron saw its Morningstar Rating move to 2 stars from 3. Regeneron has gained 25.82% over the past three months and 42.58% over the past year. The mid-value stock has a narrow economic moat. Regeneron is trading at a 27% premium to its fair value estimate of $730 per share, with an Uncertainty Rating of Medium.
Cheniere Energy LNG
- Morningstar Rating: ★★
- Fair Value: $275.00
- Uncertainty Rating: Medium
Midstream oil and gas company Cheniere gained 10.60% over the past week. Cheniere has climbed 28.27% over the past three months and 57.68% over the past year. The stock’s fair value estimate rose to $275 per share from $268 during the week. It ended the week trading at a 20% premium to its new fair value estimate, with an Uncertainty Rating of Medium. Cheniere is a mid-value company with a wide economic moat.
State Street STT
- Morningstar Rating: ★★
- Fair Value: $152.00
- Uncertainty Rating: Medium
Asset management firm State Street climbed 1.16% over the past week, bumping its Morningstar Rating to 2 stars from 3. The company’s stock is down 6.65% over the past three months and is up 50.80% over the past year. The stock’s price is 12% above its fair value estimate of $152 per share, with an Uncertainty Rating of Medium. The mid-core stock has a wide economic moat.
Vulcan Materials VMC
- Morningstar Rating: ★★
- Fair Value: $240.00
- Uncertainty Rating: Medium
Building materials firm Vulcan gained 7.47% over the past week. Vulcan has climbed 3.88% over the past three months and has dropped 2.29% over the past year. The stock’s fair value estimate rose to $240 per share from $238 during the week. It ended the week trading at a 17% premium to its new fair value estimate, with an Uncertainty Rating of Medium. Vulcan is a mid-core company with a wide economic moat.
Cheniere Energy CQP
- Morningstar Rating: ★★
- Fair Value: $60.00
- Uncertainty Rating: Medium
Midstream oil and gas company Cheniere climbed 0.70% over the past week. The company’s stock is up 3.68% over the past three months and 30.95% over the past year. The stock’s fair value estimate rose to $60 per share from $59 during the week. It ended the week trading at an 11% premium to its new fair value estimate, with an Uncertainty Rating of Medium. The mid-value stock has a wide economic moat.
Metrics for This Week’s New 1-Star Stocks
Emerson Electric EMR
- Morningstar Rating: ★
- Fair Value: $104.00
- Uncertainty Rating: High
Following a 2.07% gain over the past week, specialty industrial machinery firm Emerson saw its Morningstar Rating move to 1 star from 2. Emerson has gained 11.34% over the past three months and 22.45% over the past year. The mid-core stock has a wide economic moat. Emerson c is trading at a 59% premium to its fair value estimate of $104 per share, with an Uncertainty Rating of High.
Rockwell Automation ROK
- Morningstar Rating: ★
- Fair Value: $282.00
- Uncertainty Rating: High
Specialty industrial machinery firm Rockwell climbed 2.37% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is down 7.10% over the past three months and is up 20.92% over the past year. The stock’s price is 55% above its fair value estimate of $282 per share, with an Uncertainty Rating of High. The mid-core stock has a wide economic moat.
Incyte INCY
- Morningstar Rating: ★
- Fair Value: $86.00
- Uncertainty Rating: Medium
Biotechnology firm Incyte gained 4.04% over the past week, shifting its Morningstar Rating to 1 star from 2. Incyte has dropped 2.11% over the past three months and has climbed 30.02% over the past year. The stock is trading at a 40% premium to its fair value estimate of $86 per share, with an Uncertainty Rating of Medium. Incyte is a mid-core company with no economic moat.
Ralph Lauren RL
- Morningstar Rating: ★
- Fair Value: $250
- Uncertainty Rating: High
Apparel manufacturing company Ralph Lauren climbed 4.10% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is up 2.09% over the past three months and 22.97% over the past year. The stock’s price is 57% above its fair value estimate of $250 per share, with an Uncertainty Rating of High. The mid-core stock has a narrow economic moat.
Brinker International EAT
- Morningstar Rating: ★
- Fair Value: $151.00
- Uncertainty Rating: Medium
Following a 16.14% gain over the past week, restaurant Brinker saw its Morningstar Rating move to 1 star from 2. Brinker has gained 1.11% over the past three months and 96.30% over the past year. The small-core stock has a narrow economic moat. Brinker is trading at a 41% premium to its fair value estimate of $151 per share, with an Uncertainty Rating of Medium.
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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