In August, Morningstar identified overvalued European stocks with 1 or 2-star ratings. 12 stocks dropped to 2 stars, while 2 moved to 1-star status. 41% of the 304 Europe-listed stocks are undervalued, 41% are fairly valued, and 18% are overvalued. The Morningstar Europe Index is slightly undervalued, down 2% from fair value.

The five new 2-star European stocks include Intesa Sanpaolo, Zurich Insurance Group, Barclays, Credit Agricole, and NatWest Group. The two new 1-star stocks are Deutsche Bank and Commerzbank. These stocks have seen significant returns over the past month, with differing fair value estimates and Uncertainty Ratings.

Intesa Sanpaolo, a regional bank, is trading at a 25% premium to its fair value estimate of EUR 4.50. Zurich Insurance Group, a diversified insurance firm, is priced 9% above its fair value estimate of CHF 540. Barclays has a 22% premium to its fair value estimate of GBX 306. Credit Agricole and NatWest Group are also trading at premiums to their fair value estimates.

Deutsche Bank and Commerzbank are the two new 1-star European stocks. Deutsche Bank’s fair value estimate increased to EUR 19.70, but it’s trading at a 60% premium to that estimate. Commerzbank is valued at a 76% premium to its fair value estimate of EUR 21. Both banks have seen significant returns over the past month.

Read more at Morningstar: 12 Newly Overvalued Stocks for the Month