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Newly Undervalued Stocks for the Month

Updated for December 2024: Coloplast and Air Liquide are among the stocks that fell into undervalued territory.

Bella Albrecht 21 November, 2024 | 9:11AM
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Each month, we screen the Europe-listed stocks under Morningstar’s coverage for newly undervalued names.

Over the past month, five 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:

• Nestlé NESN
• Ørsted ORSTED
• JDE Peet’s JDEP
• Arkema AKE
• Proximus Group PROX

The five new 4-star European stocks, ordered by market-cap, are:

• Coloplast COLO B
• Air Liquide AI
• Grifols GRF.P
• ConvaTec CTEC
• Berkeley Group Holdings BKG

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 Dec. 17

The Morningstar Europe Index rose 2.24% over the past month, leaving the overall European stock market slightly undervalued, hovering at a 5% discount to its fair value estimate on a cap-weighted basis.

Of the 255 Europe-listed stocks covered by Morningstar analysts:

• 48% are undervalued, 37% are fairly valued, and 15% are overvalued.
• Five are newly undervalued.
• Eight are newly overvalued.
• Five moved from a 4-star rating to a 5-star rating.
• Five moved from a 5-star rating to a 4-star rating.
• Among the newly undervalued stocks, zero jumped from a 3-star rating to a 5-star rating.
• 14 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

Data is for Europe-listed stocks currently under analyst coverage.

Source: Morningstar Direct.

Metrics for this Month’s New 5-Star Stocks

Nestlé NESN

• Morningstar Rating: 5 stars
• One-Month Return: -2.97%

Packaged foods company Nestlé has lost 13.00% over the past three months and 20.88% over the past year. The large-core stock has a wide economic moat. Nestlé is trading at a 25% discount to its fair value estimate of CHF 100, with an Uncertainty Rating of Low.

Ørsted ORSTED

• Morningstar Rating: 5 stars
• One-Month Return: -13.82%

Renewable energy firm Ørsted has dropped 22.93% over the past three months and 9.69% over the past year. The stock is trading at a 37% discount to its fair value estimate of DKK 540, with an Uncertainty Rating of Medium. Ørsted is a large-value company with no economic moat.

JDE Peet’s JDEP

• Morningstar Rating: 5 stars
• One-Month Return: -8.16%

Packaged foods company JDE Peet’s is down 15.72% over the past three months and 28.84% over the past year. The stock’s price is 37% below its fair value estimate of EUR 27, with an Uncertainty Rating of Medium. The mid-value stock has a narrow economic moat.

Arkema AKE

• Morningstar Rating: 5 stars
• One-Month Return: -7.72%

Specialty chemicals company Arkema has dropped 11.18% over the past three months and 24.75% over the past year. The stock is trading at a 34% discount to its fair value estimate of EUR 110, with an Uncertainty Rating of Medium. Arkema is a mid-value company with no economic moat.

Proximus Group PROX

• Morningstar Rating: 5 stars
• One-Month Return: -21.58%

Telecom services firm Proximus is down 25.97% over the past three months and 32.86% over the past year. The stock’s price is 48% below its fair value estimate of EUR 9.20, with an Uncertainty Rating of Medium. The small-value stock has a narrow economic moat.

Metrics for this Month’s New 4-Star Stocks

Coloplast COLO B

• Morningstar Rating: 4 stars
• One-Month Return: -7.64%

Medical supplies company Coloplast has dropped 9.64% over the past three months and climbed 6.45% over the past year. The stock is trading at a 15% discount to its fair value estimate of DKK 962, with an Uncertainty Rating of Medium. Coloplast is a large-growth company with a wide economic moat.

Air Liquide AI

• Morningstar Rating: 4 stars
• One-Month Return: -1.18%

Specialty chemicals company Air Liquide is down 6.61% over the past three months and up 1.04% over the past year. The stock’s price is 7% below its fair value estimate of EUR 171, with an Uncertainty Rating of Low. The large-core stock has a wide economic moat.

Grifols GRF.P

• Morningstar Rating: 4 stars
• One-Month Return: -19.48%

Drug manufacturer Grifols has lost 10.82% over the past three months and 22.44% over the past year. The mid-growth stock has no economic moat. Grifols is trading at a 32% discount to its fair value estimate of EUR 10.90, with an Uncertainty Rating of Very High.

ConvaTec CTEC

• Morningstar Rating: 4 stars
• One-Month Return: -8.60%

Medical supplies company ConvaTec has dropped 1.98% over the past three months and 3.86% over the past year. The stock is trading at a 16% discount to its fair value estimate of GBX 271, with an Uncertainty Rating of Medium. ConvaTec is a mid-core company with a narrow economic moat.

Berkeley Group Holdings BKG

• Morningstar Rating: 4 stars
• One-Month Return: -8.85%

Residential construction company Berkeley Group has lost 20.36% over the past three months and 18.08% over the past year. The mid-value stock has no economic moat. Berkeley Group Holdings is trading at a 23% discount to its fair value estimate of £50.80, with an Uncertainty Rating of High.


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.

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.

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About Author

Bella Albrecht  is associate data journalist at Morningstar

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