10 New 4-Star Stocks This Week

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Once a week, we screen the US-listed stocks under Morningstar’s coverage for newly undervalued names—those whose prices have just fallen into ranges worthy of 4- or 5-star

. For the week ended April 24, 10 stocks saw their ratings change to 4 stars, while five joined the 72 US-listed names in 5-star territory

The five new 4-star stocks with the largest market capitalization are:

• Toyota Motor TM
• Lockheed Martin LMT
• General Dynamics GD
• Edison International EIX
• First Citizens Bank Trust FCNCA

The full list of new 4-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.

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

—Morningstar’s estimate of its intrinsic worth—and its , which captures the range of potential outcomes for that estimate. Stocks rated 4 or 5 stars are considered undervalued, those rated 3 stars are fairly valued, and the ones rated 1 or 2 stars are considered overvalued.

The Latest Stock Valuation Changes

The Morningstar US Market Index rose 0.48% over the past week as of April 24, leaving the overall US stock market moderately undervalued, hovering at a 5.00% discount to its fair value estimate on a market cap-weighted basis.

Of the 872 US-listed stocks covered by Morningstar analysts:

• 37% are undervalued, 41% are fairly valued, and 22% are overvalued.
• 10 are newly undervalued.
• 14 are newly overvalued.
• Five moved from 4-star to 5-star ratings.
• Four moved from 5-star to 4-star ratings.
• None of the newly undervalued stocks jumped from a 3-star rating to a 5-star rating.
• 18 are no longer undervalued.

Metrics for This Week’s New 4-Star Stocks

Toyota Motor

• Morningstar Rating: ★★★★
• Fair Value Estimate: $242.00
• Uncertainty Rating: High

Following a 11.45% loss over the past week, auto manufacturer Toyota saw its Morningstar Rating move to 4 stars from 3. Toyota has lost 15.01% over the past three months and has gained 4.61% over the past year. The large-value stock has no economic moat. Toyota is trading at a 21% discount to its fair value estimate of $242 per share, with an Uncertainty Rating of High.

Lockheed Martin

• Morningstar Rating: ★★★★
• Fair Value Estimate: $640.00
• Uncertainty Rating: Medium

Aerospace and defense company Lockheed Martin dropped 13.30% over the past week. The company’s stock is down 12.65% over the past three months and is up 13.01% over the past year. The stock’s fair value estimate was cut to $640 per share from $660 during the week. It ended the week trading at a 20% discount to its new fair value estimate, with an Uncertainty Rating of Medium. The large-core stock has a wide economic moat.

General Dynamics

• Morningstar Rating: ★★★★
• Fair Value Estimate: $362.00
• Uncertainty Rating: Medium

Aerospace and defense company General Dynamics lost 6.86% over the past week, shifting its Morningstar Rating to 4 stars from 3. General Dynamics has dropped 13.37% over the past three months and has climbed 17.41% over the past year. The stock is trading at a 13% discount to its fair value estimate of $362 per share, with an Uncertainty Rating of Medium. General Dynamics is a large-value company with a wide economic moat.

Edison International

• Morningstar Rating: ★★★★
• Fair Value Estimate: $81.00
• Uncertainty Rating: Medium

Regulated electric company Edison dropped 2.67% over the past week, bumping its Morningstar Rating to 4 stars from 3. The company’s stock is up 14.68% over the past three months and 25.44% over the past year. The stock’s price is 15% below its fair value estimate of $81 per share, with an Uncertainty Rating of Medium. The mid-value stock has a narrow economic moat.

First Citizens Bank Trust

• Morningstar Rating: ★★★★
• Fair Value Estimate: $2,330
• Uncertainty Rating: High

Regional bank First Citizens lost 4.84% over the past week. First Citizens has dropped 4.09% over the past three months and has climbed 8.35% over the past year. The stock’s fair value estimate rose to $2,330 per share from $2,220 during the week. It ended the week trading at a 17% discount to its new fair value estimate, with an Uncertainty Rating of High. First Citizens is a mid-value company with no economic moat.