Morningstar Flags 26 Newly Undervalued Stocks This Week

Morningstar’s latest weekly stock valuation update highlights 26 newly undervalued US-listed stocks, now rated 4 stars, while nine others have moved into 5-star territory. The five largest market cap stocks among the new 4-star picks include Home Depot (HDR), RTX (RTX), Anheuser-Busch (BUD), Unilever (UL), and CME Group (CME). These ratings are based on Morningstar’s analysis of a stock’s price, fair value estimate, and uncertainty rating, with 4- and 5-star stocks considered undervalued.

The Morningstar US Total Market Index declined 0.24% over the past week as of October 2, leaving the overall US stock market moderately undervalued, with a 7.00% discount to its fair value estimate. Among the 868 US-listed stocks covered by Morningstar, 46% are undervalued, 36% fairly valued, and 18% overvalued. Notably, six stocks are no longer undervalued, and three have become newly overvalued.

Home Depot’s stock dropped 3.53% last week, pushing its rating to 4 stars from 3. The stock is now 13% below its fair value estimate of $325, with a medium uncertainty rating. RTX, an aerospace and defense company, saw its rating move to 4 stars after a 2.49% loss, trading at a 14% discount to its fair value estimate of $214. Anheuser-Busch’s stock fell 5.86%, now 14% below its fair value estimate of $85. Unilever’s stock declined 4.54%, now 15% below its fair value estimate of $70. CME Group’s stock lost 0.51%, now 8% below its fair value estimate of $285.

These changes reflect Morningstar’s ongoing evaluation of stocks, helping investors identify undervalued opportunities in a fluctuating market.