Morningstar adds 10 new 5‑star US stocks, five large‑cap leaders

Morningstar’s weekly screen for the week ended May 15 upgraded ten U.S.–listed companies to its coveted 5‑star rating, the highest tier for undervalued stocks [2]. The five biggest names by market capitalisation—Amphenol, S&P Global, Accenture, Medtronic and Reckitt Benckiser—now sit at discounts of 24% to 34% from Morningstar’s fair‑value estimates, signaling sizable upside potential under the firm’s valuation framework.

Amphenol (APH) fell 2.37% over the past week, moving from a 4‑star to a 5‑star rating and now trades about 34% below its $190 fair‑value target [2]. S&P Global (SPGI) slipped 4.04% and is priced 24% under a $530 fair‑value estimate [2]. Accenture (ACN) dropped 6.43%, also at a 34% discount to a $255 fair‑value benchmark [2]. Medtronic (MDT) lost 22.84% and trades 32% below its $112 fair‑value estimate [2]. Reckitt Benckiser (RBGLY) declined 4.11%, sitting 34% under an $18.60 fair‑value target [2].

All five are classified as large‑cap stocks with economic moats, but they differ in growth versus value orientation. Amphenol and S&P Global are described as “large‑growth” and “large‑core” respectively, while Accenture, Medtronic and Reckitt Benckiser are labeled “large‑value” stocks, reflecting divergent earnings dynamics and competitive advantages. The Uncertainty Rating—Medium for four of the names and Low for S&P Global—captures the range of possible outcomes around each fair‑value estimate, suggesting that price swings could be more pronounced for the medium‑uncertainty stocks.

Morningstar’s broader market snapshot shows the US market overall hovering at a 6% discount to fair value, with 41% of the 866 covered stocks deemed undervalued [2]. The addition of ten 5‑star stocks underscores a tightening pool of highly undervalued names, as only 83 U.S. stocks retain the top rating. Investors watching valuation shifts will likely focus on whether these newly‑rated stocks sustain their discounts amid broader market movements, especially as the index slipped 0.02% that week [2].

The real question now is whether the price gaps for these five large‑cap leaders will narrow as market sentiment evolves, or if the discounts reflect deeper concerns that could keep the stocks suppressed despite their strong moats.