Investors should consider purchasing underestimated Burggraben stocks, according to Morningstar's evaluation this year.
In a recent analysis by Morningstar, a selection of 33 undervalued stocks for Q4 2024 has been identified, featuring a mix of wide-moat companies from the healthcare, pharmaceutical, tech, and software sectors. These stocks demonstrate strong earnings performances, trade at discounts to their fair value estimates, and boast durable competitive advantages.
Among the standout names are Bristol-Myers Squibb (BMY), Regeneron Pharmaceuticals (REGN), Biogen (BIIB), Pfizer (PFE), and ServiceNow (NOW).
Bristol-Myers Squibb (BMY) maintains a wide moat rating and recently outperformed expectations with a fair value estimate of $66 per share. Its stock is undervalued and has strong upside given current market sentiment and solid earnings beats.
Regeneron Pharmaceuticals (REGN) is another wide-moat name with a 23% discount to fair value. It crushed Q2 earnings expectations with EPS of $12.90 versus $8.40 consensus and revenues of $3.7 billion versus $3.3 billion consensus, supporting its upside potential.
Biogen (BIIB) is highlighted for favourable conditions in biotech with less regulatory pressure, making it a preferred name within the healthcare sector for growth and undervaluation.
Pfizer (PFE) remains undervalued despite pharma sector pressures, with strong recent earnings beats, making it a credible moat stock with upside potential.
ServiceNow (NOW) is a wide-moat software stock that raised its fair value estimate to $1,050 from $1,010 based on strong Q2 results, conservative guidance despite optimism, and robust future revenue growth forecasts (18% CAGR over five years). It is viewed as slightly undervalued and well-positioned to benefit from new product traction and upsell opportunities.
Other notable moat stocks mentioned for their undervaluation and potential include Microsoft, which holds a 4-star rating and is considered undervalued relative to a long-term fair value of $600 per share.
However, it's worth noting that Morningstar warns against buying certain ETFs. Additionally, MarketAxess Holdings and U.S. Bancorp are two financial stocks with undervalued status, but their long-term growth and profitability are questioned due to potential market regulations or loss of market share.
In an interesting twist, the moat stock with the most upside potential is Estee Lauder, with a recommended buy price of 149 euros and an upside potential of 75%. Meanwhile, Nike has an upside potential of 39%, according to Morningstar.
Lastly, one of the safest German stocks offers an entry opportunity with a P/E ratio of 10.5 and a dividend yield of 3.63%. This fact was not mentioned in the previous paragraphs, providing an additional investment opportunity for those seeking a stable and profitable choice.
Finance plays a significant role in the undervalued stocks identified by Morningstar for Q4 2024, with several stocks demonstrating strong earnings beats and potential for growth in various sectors. Investing in securities such as Bristol-Myers Squibb (BMY), Regeneron Pharmaceuticals (REGN), Biogen (BIIB), Pfizer (PFE), and ServiceNow (NOW) can provide attractive returns due to their discounts to fair value and solid earnings performances. Additionally, technology stocks like ServiceNow (NOW) are favorably positioned for growth, having raised their fair value estimate based on strong results and revenue growth forecasts.
