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
FAQs
The Bottom Line. Morningstar acknowledges its rating system is a quantitative measure of a fund's past performance that is not intended to accurately predict future performance. Instead, the company recommends investors use the rating system to evaluate a fund's track record compared to its peers.
Is a 2 star Morningstar rating good? ›
A 2-star rating means the stock is overvalued and trading at a slight premium relative to its fair value estimate. Subscribe to Morningstar Investor to see what companies are trading at a discount.
Is a 1-star Morningstar rating good? ›
A 1-star rating means the stock is overvalued and trading at a premium relative a its fair value estimate.
Do Morningstar 5 star stocks outperform? ›
Analysis of cumulative returns clearly shows that investors who focused solely on 5-star stocks would outperform those focused solely on 1-star stocks. This could suggest that Morningstar's ranking model is able to effectively discriminate between the best and worst performers, at least on a relative basis.
Where does Morningstar get its data from? ›
Morningstar collects and presents data via its own team of dedicated Data Analysts. The data is captured primarily from Audited source materials such as Annual Report and Accounts and mid-year financial releases.
Is it worth paying for Morningstar? ›
If you are an active and value investor, Morningstar is the perfect investment research service for you. They have extensive research on everything from mutual funds to bonds, covering more than 620,000 investments.
Which is better, Morningstar or Seeking Alpha? ›
For screening and research tools, Seeking Alpha seems to have greater capabilities. But Morningstar is stronger when it comes to fund ratings, model portfolios, and some data sets.
What is the difference between Morningstar Rating and Morningstar analyst rating? ›
To receive a Morningstar Rating, a fund must have a record of more than three years. Morningstar assigns the Analyst Rating to funds that analysts qualitatively assess, typically through manager interviews and other sources.
Is Morningstar healthy? ›
Packaged veggie burgers (like Morning Star Farms or Boca) can also be a part of a healthy eating plan. They're a quick and convenient way to enjoy a meatless meal and typically run from 70 to 130 calories per patty. Pair with a whole-grain bun and pile the fresh veggies high for a well-balanced meal.
Can Morningstar be trusted? ›
Morningstar reviews of mutual funds and ETFs can be helpful for comparing investments, especially if you're just getting started with the markets. Morningstar is a respected and trusted institution and both the Star and Analyst Ratings are calculated using a systematic approach.
Funds whose risk-adjusted returns fall within the top 10% relative to category peers receive a 5-star rating. Subscribe to Morningstar Investor to get the full picture of an ETF's potential.
What is the return rate for Morningstar? ›
Morningstar Return - Mutual Funds
In each Morningstar Category, the top 10% of funds earn a High Morningstar Return, the next 22.5% Above Average, the middle 35% Average, the next 22.5% Below Average, and the bottom 10% Low. Morningstar Return is measured for up to three time periods (three-, five-, and 10-years).
Who are the top competitors of Morningstar? ›
Morningstar, Inc. (MORN) is a leading provider of financial information via Internet, software, and print-based products to individual, professional, and institutional investors. Its largest competitors in the financial information sector are Bloomberg, L.P., MarketWatch, Inc., and Thomson Reuters Corp.
What is the most undervalued Morningstar stock? ›
The 10 most undervalued stocks from our Best Companies to Own list as of April 29, 2024, were:
- Polaris PII.
- British American Tobacco BTI.
- Pfizer PFE.
- Imperial Brands IMBBY.
- Ambev ABEV.
- Rentokil Initial RTO.
- Anheuser-Busch InBev BUD.
- Gilead Sciences GILD.
Fidelity provides access to research and Closed End Fund ratings from leading independent research firm Morningstar. Fidelity updates reports as new ones are received from Morningstar.
How does Morningstar measure quality? ›
How does the Morningstar Medalist Rating work? 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.
How often is Morningstar data updated? ›
Each month, Morningstar's data team updates monthly performance of the investments we track. This process culminates in the release of Morningstar Ratings (“star ratings”) and official category ranks.
What is the Morningstar uncertainty rating? ›
The Morningstar Uncertainty Rating is designed to capture the range of potential outcomes for a company's intrinsic (or fair) value and helps analysts identify when a higher margin of safety is needed before investing, which in turn drives our stock star rating system.
