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Each week, we screen the US-listed stocks under Morningstar’s coverage for newly overvalued names. Stocks with a Morningstar Rating of 1 or 2 stars are considered overvalued. For the week ended Aug. 8, 14 stocks saw their ratings change to 2 stars, while three climbed into 1-star territory. Stocks rated 3 stars are fairly valued according to Morningstar analysts, while those rated 4 or 5 stars are considered undervalued.
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 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.
Newly Overvalued Stocks for the Week Ended Aug. 8
The Morningstar US Market Index rose 2.33% over the past week, leaving the overall US stock market slightly overvalued, hovering at a 5% premium to its fair value estimate on a cap-weighted basis.
Of the 844 US-listed stocks covered by Morningstar analysts:
- 36% are undervalued, 42% are fairly valued, and 22% are overvalued.
- 24 are newly undervalued.
- 14 are newly overvalued.
- Three moved from a 2-star rating to a 1-star rating.
- Three 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.
- 20 are no longer overvalued.
Morningstar analysts assign every stock under their coverage a fair value estimate, which is an intrinsic measure of the stock’s worth, and an Uncertainty Rating, which captures the range of potential outcomes for that estimate. A higher Uncertainty Rating equates to a larger range of prices considered fairly valued. These two metrics and the stock’s current price determine its Morningstar Rating.
Metrics for This Week’s New 2-Star Stocks
Tesla
- Morningstar Rating: ★★
- One-Week Return: 8.93%
Auto manufacturer Tesla has climbed 15.74% over the past three months and 65.79% over the past year. The stock is trading at a 32% premium to its fair value estimate of $250 per share, with an Uncertainty Rating of Very High. Tesla is a large-core company with a narrow economic moat.
Amphenol
- Morningstar Rating: ★★
- One-Week Return: 5.44%
Electronic components company Amphenol has gained 36.73% over the past three months and 77.96% over the past year. The large-growth stock has a wide economic moat. Amphenol is trading at a 16% premium to its fair value estimate of $95 per share, with an Uncertainty Rating of Medium.
HCA Healthcare
- Morningstar Rating: ★★
- One-Week Return: 6.90%
Medical care facilities firm HCA has climbed 8.03% over the past three months and 6.64% over the past year. The stock is trading at a 15% premium to its fair value estimate of $333 per share, with an Uncertainty Rating of Medium. HCA is a large-value company with a narrow economic moat.
CRH
- Morningstar Rating: ★★
- One-Week Return: 14.76%
Building materials firm CRH has gained 16.81% over the past three months and 36.08% over the past year. The mid-core stock has a narrow economic moat. CRH is trading at a 21% premium to its fair value estimate of $90 per share, with an Uncertainty Rating of Medium.
Itaú Unibanco Holding
- Morningstar Rating: ★★
- One-Week Return: 9.11%
Regional bank Itaú Unibanco has climbed 11.44% over the past three months and 36.41% over the past year. The stock is trading at a 16% premium to its fair value estimate of $5.90 per share, with an Uncertainty Rating of Medium. Itaú Unibanco is a large-value company with no economic moat.
Metrics for This Week’s New 1-Star Stocks
AutoZone
- Morningstar Rating: ★
- One-Week Return: 4.57%
Auto parts firm AutoZone has gained 9.81% over the past three months and 27.82% over the past year. The mid-core stock has a wide economic moat. AutoZone is trading at a 39% premium to its fair value estimate of $2,900 per share, with an Uncertainty Rating of Medium.
Alnylam Pharmaceuticals
- Morningstar Rating: ★
- One-Week Return: 9.24%
Biotechnology firm Alnylam has climbed 69.90% over the past three months and 62.29% over the past year. The stock is trading at a 66% premium to its fair value estimate of $265 per share, with an Uncertainty Rating of High. Alnylam is a mid-growth company with a narrow economic moat.
Corning
- Morningstar Rating: ★
- One-Week Return: 6.00%
Electronic components company Corning is up 46.82% over the past three months and 74.46% over the past year. The stock’s price is 40% above its fair value estimate of $47 per share, with an Uncertainty Rating of Medium. The mid-core stock has a narrow economic moat.
