13 Newly Overvalued Stocks This Week
Micron and SK Hynix 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
The five new 2-star stocks with the largest market capitalization are:
The three new 1-star stocks, ordered by market capitalization, are:
The full list of new 2-star stocks is 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
The Latest Stock Valuation Changes
The Morningstar US Total Market Index rose 1.11% over the past week as of Sept. 25, leaving the overall US stock market moderately undervalued, hovering at an 8% discount to its fair value estimate on a market cap-weighted basis.
Of the 872 US-listed stocks covered by Morningstar analysts:
- 43% are undervalued, 38% are fairly valued, and 19% are overvalued.
- 41 are newly undervalued.
- 13 are newly overvalued.
- Three moved from a 2-star rating to a 1-star rating.
- Two moved from a 1-star rating to a 2-star rating.
- None of the 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
Micron Technology MU
- Morningstar Rating: ★★
- Fair Value Estimate: $850.00
- Uncertainty Rating: Very High
Following a 6.54% gain over the past week, semiconductor company Micron saw its Morningstar Rating move to 2 stars from 3. Micron has lost 10.80% over the past three months and has gained 591.22% over the past year. The large-core stock has no economic moat. Micron is trading at a 27% premium to its fair value estimate of $850 per share, with an Uncertainty Rating of Very High.
SK Hynix SKHY
- Morningstar Rating: ★★
- Fair Value Estimate: $152.00
- Uncertainty Rating: Very High
Semiconductor company SK Hynix climbed 2.17% over the past week, bumping its Morningstar Rating to 2 stars from 3. The stock’s price is 26% above its fair value estimate of $152 per shares, with an Uncertainty Rating of Very High. The large-core stock has no economic moat.
Palo Alto Networks PANW
- Morningstar Rating: ★★
- Fair Value Estimate: $300.00
- Uncertainty Rating: Very High
Software infrastructure firm Palo Alto gained 3.07% over the past week, shifting its Morningstar Rating to 2 stars from 3. Palo Alto has climbed 27.86% over the past three months and 85.32% over the past year. The stock is trading at a 25% premium to its fair value estimate of $300 per share, with an Uncertainty Rating of Very High. Palo Alto is a large-growth company with a wide economic moat.
Amgen AMGN
- Morningstar Rating: ★★
- Fair Value Estimate: $342.00
- Uncertainty Rating: High
Drug manufacturer Amgen climbed 7.51% over the past week, bumping its Morningstar Rating to 2 stars from 3. The company’s stock is up 18.19% over the past three months and 57.11% over the past year. The stock’s price is 21% above its fair value estimate of $342 per share, with an Uncertainty Rating of High. The large-value stock has a wide economic moat.
Qualcomm QCOM
- Morningstar Rating: ★★
- Fair Value Estimate: $170.00
- Uncertainty Rating: High
Semiconductor company Qualcomm gained 13.65% over the past week, shifting its Morningstar Rating to 2 stars from 3. Qualcomm has dropped 0.89% over the past three months and has climbed 21.53% over the past year. The stock is trading at a 19% premium to its fair value estimate of $170 per share, with an Uncertainty Rating of High. Qualcomm is a large-value company with a narrow economic moat.
Metrics for This Week’s New 1-Star Stocks
Arm ARM
- Morningstar Rating: ★
- Fair Value Estimate: $190.00
- Uncertainty Rating: High
Semiconductor company Arm climbed 12.59% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is down 10.75% over the past three months and is up 120.63% over the past year. The stock’s price is 63% above its fair value estimate of $190 per share, with an Uncertainty Rating of High. The stock has a wide economic moat.
Illumina ILMN
- Morningstar Rating: ★
- Fair Value Estimate: $165.00
- Uncertainty Rating: High
Following a 12.68% gain over the past week, diagnostics and research firm Illumina saw its Morningstar Rating move to 1 star from 2. Illumina has gained 51.98% over the past three months and 192.87% over the past year. The mid-growth stock has a narrow economic moat. Illumina is trading at a 64% premium to its fair value estimate of $165 per share, with an Uncertainty Rating of High.
Brinker International EAT
- Morningstar Rating: ★
- Fair Value Estimate: $151
- Uncertainty Rating: Medium
Restaurant company Brinker climbed 5.33% over the past week, bumping its Morningstar Rating to 1 star from 2. The company’s stock is up 19.49% over the past three months and 55.75% over the past year. The stock’s price is 37% above its fair value estimate of $151 per share, with an Uncertainty Rating of Medium. The small-core 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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