In July, Morningstar identified overvalued European stocks based on their Morningstar Ratings. Four stocks dropped to 2 stars, one to 1 star, while none improved. Notably, ABB, Ferrari, Siemens Energy, Danske Bank, and Sandvik are new 2-star stocks. Meanwhile, Heidelberg Materials, Galderma, and Swisscom are newly rated as 1-star stocks.

Morningstar’s analysis of 303 European stocks found 40% undervalued, 41% fairly valued, and 19% overvalued. 13 stocks became undervalued, 10 became overvalued, with 3 dropping from 2 stars to 1 star. Notably, 9 stocks are no longer overvalued. Each stock has a fair value estimate and an Uncertainty Rating used to determine its Morningstar Rating.

The newly 2-star stocks include ABB, Ferrari, Siemens Energy, Danske Bank, and Sandvik, all showing positive returns over the past month. These stocks are trading at premiums to their fair value estimates, with varying levels of uncertainty. Conversely, Heidelberg Materials, Galderma, and Swisscom, newly rated as 1-star stocks, are trading at significant premiums to their fair value estimates.

Read more at Morningstar: 10 Newly Overvalued Stocks for the Month