9 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 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 5-star stocks with the largest market capitalization are:

• Deutsche Telekom DTEGY
• Mondelez International MDLZ
• Boston Scientific BSX
• DTE Energy DTE
• Fair Isaac FICO

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

—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 5-Star Stocks

Deutsche Telekom DTEGY

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

Telecom services firm Deutsche Telekom lost 3.50% over the past week, shifting its Morningstar Rating to 5 stars from 4. Deutsche Telekom has climbed 4.07% over the past three months and has dropped 9.53% over the past year. The stock is trading at a 32% discount to its fair value estimate of $44 per share, with an Uncertainty Rating of Medium. Deutsche Telekom is a large-value company with a narrow economic moat.

Mondelez International MDLZ

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $77.00
• Uncertainty Rating: Low

Following a 2.55% loss over the past week, confectioner Mondelez saw its Morningstar Rating move to 5 stars from 4. Mondelez has lost 3.61% over the past three months and 2.41% over the past year. The mid-value stock has a wide economic moat. Mondelez is trading at a 24% discount to its fair value estimate of $77 per share, with an Uncertainty Rating of Low.

Boston Scientific BSX

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $64.00
• Uncertainty Rating: Medium

Medical devices company Boston Scientific dropped 3.01% over the past week, bumping its Morningstar Rating to 5 stars from 4. The company’s stock is down 5.63% over the past three months and 55.73% over the past year. The stock’s price is 33% below its fair value estimate of $64 per share, with an Uncertainty Rating of Medium. The mid-core stock has a narrow economic moat.

DTE Energy DTE

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $157.00
• Uncertainty Rating: Low

Following a 2.48% gain over the past week, regulated electric company DTE saw its Morningstar Rating move to 5 stars from 4. DTE has lost 18.47% over the past three months and 7.57% over the past year. The mid-value stock has a narrow economic moat. DTE is trading at a 21% discount to its fair value estimate of $157 per share, with an Uncertainty Rating of Low.

Fair Isaac FICO

• Morningstar Rating: ★★★★★
• Fair Value Estimate: $1,140.00
• Uncertainty Rating: High

Software application firm Fair Isaac dropped 23.39% over the past week. The company’s stock is down 47.97% over the past three months and 62.95% over the past year. The stock’s fair value estimate was cut to $1,140 per share from $1,250 during the week. It ended the week trading at a 42% discount to its new fair value estimate, with an Uncertainty Rating of High. The small-growth stock has a wide economic moat.