Morningstar
RecommendedSign Up to Our Newsletters Open Window IconMorningstar's Guide to Investing in Stocks Arrow Right
Equity Research & Insights

26 Newly Undervalued Stocks for the Month

Updated for March 2025: Rolls Royce and Novo Nordisk are among the stocks that fell into undervalued territory.

Bella Albrecht 19 March, 2025 | 11:07AM
Facebook Twitter LinkedIn
Font-Size

Photo collage illustration of graph elements and sterling coins floating.

Each month, we screen the Europe-listed stocks under Morningstar’s coverage for newly undervalued names.

Over the past month, 25 stocks saw their Morningstar Ratings change to 4 stars, while another five dropped into 5-star territory. Stocks rated 3 stars are fairly valued according to Morningstar analysts, while those rated 1 or 2 stars are considered overvalued.

The five new 5-star European stocks, ordered by market-cap, are:

· Rheinmetall RHM

· Carnival CCL

· Melrose Industries MRO

· Puma PUM

· ASOS ASC

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

· Novo Nordisk NOVO B

· Ericsson ERIC B

· HSBC Holdings HSBA

· BP BP.

· Rolls-Royce Holdings RR.

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.

Newly Undervalued Stocks as of March 18

The Morningstar Europe Index fell 0.25% over the past month, leaving the overall European stock market significantly undervalued, hovering at a 63% discount to its fair value estimate on a cap-weighted basis.

Of the 298 Europe-listed stocks covered by Morningstar analysts:

· 42% are undervalued, 39% are fairly valued, and 18% are overvalued.

· 26 are newly undervalued.

· 13 are newly overvalued.

· Four moved from a 4-star rating to a 5-star rating.

· Four moved from a 5-star rating to a 4-star rating.

· Among the newly undervalued stocks, one jumped from a 3-star rating to a 5-star rating.

· 24 are no longer undervalued.

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, are used to determine its Morningstar Rating.

Distribution of Star Ratings for Europe-Listed Stocks

Source: Morningstar Direct. Data as of March 18, 2025.

Metrics for this Month’s New 5-Star Stocks

Rheinmetall RHM

· Morningstar Rating: ★★★★★

· One-Month Return: 55.63%

Aerospace and defense company Rheinmetall has climbed 135.73% over the past three months and 206.33% over the past year. The fair value estimate for Rheinmetall rose to EUR 2,220 from EUR 870 during the month. It ended the month trading at a 35% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Rheinmetall is a large-growth company with a wide economic moat.

Read more about Morningstar’s recent fair value upgrade of Rheinmetall in this story.

Carnival CCL

· Morningstar Rating: ★★★★★

· One-Month Return: -24.28%

Travel services company Carnival has lost 24.70% over the past three months and gained 20.24% over the past year. The large-core stock has a narrow economic moat. Carnival is trading at a 45% discount to its fair value estimate of GBX 2,560, with an Uncertainty Rating of High.

Melrose Industries MRO

· Morningstar Rating: ★★★★★

· One-Month Return: -18.29%

Specialty industrial machinery firm Melrose Industries has dropped 4.26% over the past three months and 13.44% over the past year. The fair value estimate for Melrose rose to GBX 800 from GBX 740 during the month. It ended the month trading at a 34% discount to its new fair value estimate, with an Uncertainty Rating of Medium. Melrose is a mid-growth company with a wide economic moat.

Puma PUM

· Morningstar Rating: ★★★★★

· One-Month Return: -18.51%

Accessory firm Puma has lost 47.22% over the past three months and 40.23% over the past year. The mid-value stock has no economic moat. The fair value estimate for Puma was cut to EUR 46.50 from EUR 48 during the month. It ended the month trading at a 48% discount to its new fair value estimate, with an Uncertainty Rating of High.

ASOS ASC

· Morningstar Rating: ★★★★★

· One-Month Return: -33.90%

Internet retail company ASOS is down 40.08% over the past three months and 28.70% over the past year. The stock’s price is 62% below its fair value estimate of GBX 640, with an Uncertainty Rating of Very High. The small-value stock has no economic moat.

Metrics for this Month’s New 4-Star Stocks

Novo Nordisk NOVO B

· Morningstar Rating: ★★★★

· One-Month Return: -6.37%

Drug manufacturer Novo Nordisk has dropped 28.77% over the past three months and 39.22% over the past year. The stock is trading at a 14% discount to its fair value estimate of DKK 640, with an Uncertainty Rating of High. Novo Nordisk is a large-growth company with a wide economic moat.

Ericsson ERIC B

· Morningstar Rating: ★★★★

· One-Month Return: -2.39%

Communication equipment firm Ericsson is down 7.98% over the past three months and up 54.94% over the past year. The stock’s price is 12% below its fair value estimate of SEK 95, with an Uncertainty Rating of Medium. The large-value stock has no economic moat.

HSBC Holdings HSBA

· Morningstar Rating: ★★★★

· One-Month Return: 2.73%

The bank HSBC has gained 20.15% over the past three months and 62.12% over the past year. The large-value stock has no economic moat. The fair value estimate for HSBC rose to GBX 980 from GBX 878 during the month. It ended the month trading at a 9% discount to its new fair value estimate, with an Uncertainty Rating of Medium.

BP BP.

· Morningstar Rating: ★★★★

· One-Month Return: -4.03%

Oil and gas firm BP is up 15.75% over the past three months and down 6.19% over the past year. The fair value estimate for BP rose to GBX 511 from GBX 490 during the month. It ended the month trading at a 14% discount to its new fair value estimate, with an Uncertainty Rating of High. The large-value stock has no economic moat.

Rolls-Royce Holdings RR.

· Morningstar Rating: ★★★★

· One-Month Return: 25.88%

Aerospace and defense company Rolls-Royce has climbed 38.24% over the past three months and 108.00% over the past year. The fair value estimate for Rolls-Royce rose to GBX 960 from GBX 380 during the month. It ended the month trading at a 16% discount to its new fair value estimate, with an Uncertainty Rating of High. Rolls-Royce is a large-growth company with a narrow economic moat.


This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

TAGS

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn
Font-Size

About Author

Bella Albrecht  is associate data journalist at Morningstar

© Copyright 2025 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures

The Morningstar Star Rating for Stocks is assigned based on an analyst's estimate of a stocks fair value. It is projection/opinion and not a statement of fact. Morningstar assigns star ratings based on an analyst’s estimate of a stock's fair value. Four components drive the Star Rating: (1) our assessment of the firm’s economic moat, (2) our estimate of the stock’s fair value, (3) our uncertainty around that fair value estimate and (4) the current market price. This process culminates in a single-point star rating that is updated daily. A 5-star represents a belief that the stock is a good value at its current price; a 1-star stock isn't. If our base-case assumptions are true the market price will converge on our fair value estimate over time, generally within three years. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Morningstar Star Rating for Stocks, please visit here

Quantitative Fair Value Estimate represents Morningstar’s estimate of the per share dollar amount that a company’s equity is worth today. The Quantitative Fair Value Estimate is based on a statistical model derived from the Fair Value Estimate Morningstar’s equity analysts assign to companies which includes a financial forecast of the company. The Quantitative Fair Value Estimate is calculated daily. It is a projection/opinion and not a statement of fact. Investments in securities are subject to market and other risks. Past performance of a security may or may not be sustained in future and is no indication of future performance. For detail information about the Quantiative Fair Value Estimate, please visit here

The Morningstar Medalist Rating is the summary expression of Morningstar’s forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform a relevant index or peer group average on a risk-adjusted basis over time. Investment products are evaluated on three key pillars (People, Parent, and Process) which, when coupled with a fee assessment, forms the basis for Morningstar’s conviction in those products’ investment merits and determines the Medalist Rating they’re assigned. Pillar ratings take the form of Low, Below Average, Average, Above Average, and High. Pillars may be evaluated via an analyst’s qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. Vehicles are sorted by their expected performance into rating groups defined by their Morningstar Category and their active or passive status. When analysts directly cover a vehicle, they assign the three pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them at least every 14 months. When the vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. For more detailed information about these ratings, including their methodology, please go to here

The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) are not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involve the risk that the return target will not be met due to such things as unforeseen changes in changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, tax rates, exchange rate changes, and/or changes in political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate.

For information on the historical Morningstar Medalist Rating for any managed investment Morningstar covers, please contact your local Morningstar office.

For more detailed information about conflicts of interest, including EU MAR disclosures, please see the “Morningstar Medalist Rating Analyst Conflict of Interest & Other Disclosures for EMEA”here

Select Your Site Edition To make sure the site is relevant to you, we need to know if you’re an individual investor or a financial professional.