Morningstar

9 New 5-Star Stocks This Week

Broadcom and Sanofi are now seen as significantly undervalued.

Broadcom Inc. signage outside the company headquarters.
Aaron M. Sprecher via AP
Securities in This Article
Sanofi SA ADR
(SNY)
ServiceNow Inc
(NOW)
Broadcom Inc
(AVGO)
DraftKings Inc Ordinary Shares - Class A
(DKNG)
Intuit Inc
(INTU)

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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

Morningstar Ratings
. For the week ended June 26, 22 stocks saw their ratings change to 4 stars, while nine joined the 93 US-listed names in 5-star territory.

The five new 5-star stocks with the largest market capitalization are:

The full list of new 5-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 Market Index fell 1.76% over the past week as of June 26, leaving the overall US stock market significantly undervalued, hovering at an 11.00% discount to its fair value estimate on a market cap-weighted basis.

Of the 874 US-listed stocks covered by Morningstar analysts:

  • 39% are undervalued, 37% are fairly valued, and 23% are overvalued.
  • 22 are newly undervalued.
  • 21 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.
  • 26 are no longer undervalued.

Metrics for This Week’s New 5-Star Stocks

Broadcom

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $650.00
  • Uncertainty Rating: High

Following a 11.12% loss over the past week, semiconductor company Broadcom saw its Morningstar Rating move to 5 stars from 4. Broadcom has gained 18.17% over the past three months and 36.10% over the past year. The large-growth stock has a wide economic moat. Broadcom is trading at a 44% discount to its fair value estimate of $650 per share, with an Uncertainty Rating of High.

Sanofi

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $63.00
  • Uncertainty Rating: Medium

Drug manufacturer Sanofi climbed 1.34% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 2.73% over the past three months and 6.25% over the past year. The stock’s price is 32% below its fair value estimate of $63 per share, with an Uncertainty Rating of Medium. The large-value stock has a narrow economic moat.

ServiceNow

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $165.00
  • Uncertainty Rating: High

Software application firm ServiceNow gained 3.47% over the past week, shifting its Morningstar Rating to 5 stars from 4. ServiceNow has dropped 5.11% over the past three months and 51.39% over the past year. The stock is trading at a 40% discount to its fair value estimate of $165 per share, with an Uncertainty Rating of High. ServiceNow is a large-growth company with a narrow economic moat.

Intuit

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $455.00
  • Uncertainty Rating: High

Following a 0.27% gain over the past week, software application firm Intuit saw its Morningstar Rating move to 5 stars from 4. Intuit has lost 37.90% over the past three months and 65.07% over the past year. The large-value stock has a narrow economic moat. Intuit is trading at a 41% discount to its fair value estimate of $455 per share, with an Uncertainty Rating of High.

DraftKings

  • Morningstar Rating: ★★★★★
  • Fair Value Estimate: $45.00
  • Uncertainty Rating: High

Gambling company DraftKings dropped 2.61% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is up 20.83% over the past three months and is down 39.14% over the past year. The stock’s price is 43% below its fair value estimate of $45 per shares, with an Uncertainty Rating of High. The small-growth stock has a narrow 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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