Each month, we analyze the stocks listed in Europe that fall under Morningstar’s coverage to identify newly undervalued options.
In the previous month, 25 stocks received updated Morningstar Ratings, increasing to 4 stars, while an additional five stocks improved to the 5-star category. According to Morningstar analysts, stocks with a 3-star rating are considered fairly valued, whereas those with 1 or 2 stars are deemed overvalued.
Newly Rated 5-Star European Stocks
The following five stocks have recently achieved a 5-star rating, listed by market capitalization:
Newly Rated 4-Star European Stocks
The five newly rated 4-star European stocks with the largest market capitalizations are:
Market Overview
The Morningstar Europe Index experienced a decline of 0.25% over the last month, which indicates that the overall European stock market remains significantly undervalued, currently at a 63% discount relative to its fair value estimate based on capitalization-weighting.
Of the 298 Europe-listed stocks analyzed by Morningstar:
- 42% are undervalued, 39% are fairly valued, and 18% are overvalued.
- 26 stocks have recently become undervalued.
- 13 stocks are now classified as overvalued.
- Four stocks upgraded from 4 stars to 5 stars.
- Four stocks downgraded from 5 stars to 4 stars.
- Among those newly undervalued, one stock improved from 3 stars to 5 stars.
- 24 stocks have ceased to be undervalued.
Understanding Stock Ratings
Morningstar analysts assign a fair value estimate to each stock in their coverage, representing an intrinsic measure of the stock’s value, along with an Uncertainty Rating reflecting the potential variability of that estimate. A higher Uncertainty Rating indicates a broader range of prices deemed fairly valued.
These indicators, combined with the stock’s current price, determine its Morningstar Rating.
Conclusion
The trends in stock ratings showcase shifting market dynamics, allowing investors to gauge opportunities. For detailed metrics on the new 5-star and 4-star stocks, please refer to the respective tables included in this report. All returns mentioned are based on the stock’s base currency, and all data originates from Morningstar Direct.
