From Morningstar: 2024-11-19 06:07:52

Investors are wondering if now is a good time to buy stocks, given the strong market performance this year. Morningstar metrics show equity markets are not overvalued, but not cheap either, with differences between regions and sectors. The Morningstar Global Markets NR index gained 21.9% in euro terms through Nov.7.

The average rating of 1,596 companies analyzed is 3.1, indicating fair value. 26% are considered expensive, while 37% are undervalued. When factoring in market capitalization, the weighted average rating rises to 2.8, making the market slightly overvalued.

European stocks appear more attractive than U.S. stocks, with 33% of European stocks rated 4-5 stars compared to 23% in the U.S. The percentage of “expensive” stocks in the U.S. is also higher. The financial sector is the least favorable for investment opportunities.

The defensive consumer sector has the highest percentage of companies with 4-5 stars, while the financial sector has the fewest. Morningstar’s Stock Rating helps determine if a stock is overvalued or undervalued. The rating considers uncertainty in estimates and may vary even with similar Price/Fair Value ratios.



Read more at Morningstar: Is Now a Good Time to Buy Stocks?