In the second quarter of 2025, President Trump’s tariffs caused market uncertainty. Morningstar reevaluated companies’ moat ratings, reflecting competitive advantages. Companies with wide moats last 20+ years, narrow moats last 10-20 years. Moat ratings are rarely reassigned but can change due to company or industry shifts. In Q2, 5 companies had moat rating changes out of 307.

Morningstar’s Europe coverage includes 307 stocks, 81 with wide moats, 113 with narrow moats, and 113 with no moats. Economic moats help companies maintain a competitive advantage. Morningstar analysts assess moats based on sources like switching costs, network effects, intangible assets, cost advantage, and efficient scale.

ASM International received a wide moat rating for 20 years due to design expertise and semiconductor importance. Besi also got a wide moat rating for advanced semiconductor packaging. Epiroc’s wide moat comes from brand reputation and aftermarket services. Sandvik’s wide moat is in niche mining tech. Siemens Energy upgraded to a narrow moat due to industry trends.

Morningstar’s moat ratings assess companies’ long-term competitive advantages. Factors like design expertise, industry importance, and brand reputation influence wide moat ratings. Economic moats help companies maintain market positions and generate returns above cost of capital. Analysts evaluate sources like switching costs, network effects, and cost advantages to determine moat ratings.

Read more at Morningstar: 5 European Stocks with Moat Rating Changes in Q2