The Morningstar Wide Moat Focus Index tracks companies that earn Morningstar Economic Moat Ratings of wide and whose stocks are trading at the lowest market prices relative to our fair value estimates.
Wide-moat companies carry sound balance sheets and significant competitive advantages—two desirable qualities in the face of today’s economic uncertainty.
The constituents of the Morningstar Wide Moat Focus Index are a fertile hunting ground for long-term investors looking for high-quality stocks to invest in that are trading at attractive valuations (all returns in this article are measured on a US dollar basis).
10 Wide-Moat Stocks Trading at Attractive Discounts to Fair Value
These were 10 of the most undervalued wide-moat stocks in the Morningstar Wide Moat Focus Index as of April 3, 2026.
- Nike NKE
- CoStar Group CSGP
- Fair Isaac Corp FICO
- LPL Financial LPLA
- Broadridge Financial Solutions BR
- Estee Lauder EL
- Veeva Systems VEEV
- TransUnion TRU
- Clorox CLX
- Microsoft MSFT
The most undervalued wide-moat stock on the list, Nike, was trading 57% below our fair value estimate as of April 3, while the last company on the list, Microsoft, was trading 38% below our fair value estimate. We think all 10 of these names are high-quality stock ideas for long-term investors to consider.
To keep the index focused on the least-expensive high-quality stocks, Morningstar reconstitutes it regularly. The index comprises two subportfolios containing 40 stocks each, many of which are overlapping positions. The subportfolios are reconstituted semiannually in alternating quarters on a “staggered” schedule.
Morningstar reevaluates the index’s holdings and adds and removes stocks based on a preset methodology. Because stocks are equally weighted within each subportfolio, the reconstitution process also involves rightsizing positions.
After the most recent reconstitution, half the portfolio added 11 stocks and eliminated 11 stocks.
11 Undervalued Stocks Added to the Morningstar Wide Moat Focus Index
These mispriced stocks were added to the reconstituted subportfolio of the Morningstar Wide Moat Focus Index on March 20, 2026.
Five of the 11 undervalued wide-moat stocks added to the index this quarter hail from the discounted technology sector; the remaining stocks with attractive valuations come from a smattering of other industries.
11 Stocks Removed From the Morningstar Wide Moat Focus Index
These stocks were removed from the reconstituted subportfolio of the Morningstar Wide Moat Focus Index on March 20, 2026. Stocks can be removed from the index for a few different reasons: if we downgrade their economic moat ratings, if their market capitalizations fall beneath a certain level, or if their price/fair value ratios rise significantly.
Most of the stocks removed from the subportfolio during the latest reconstitution were pushed out by stocks that were trading at more attractive valuations at the time of reconstitution. However, three stocks—Adobe ADBE, Salesforce CRM, and Workday WDAY—were removed from the index because their Morningstar Economic Moat Ratings were downgraded to narrow from wide.
The stocks that were removed shouldn’t always be considered stocks to sell, though—especially when the removed stocks are still trading in what we’d consider a buying range. They’re just not as undervalued as the stocks added to the index at the time of the reconstitution.
What Are Wide-Moat Stocks?
Morningstar thinks that companies with wide economic moats have significant advantages that allow them to successfully fend off competitors for decades. Companies can carve out their economic moats in a variety of different ways: by having high switching costs, through strong brand identities, or by possessing economies of scale, to name just a few.
Over time, we’ve found that the strategy of investing in wide-moat stocks trading at a discount to their fair values has been an effective approach to stock investing.
