In Europe, Morningstar identifies newly overvalued stocks with 1- or 2-star ratings. Seven stocks dropped to 2 stars, and one entered the 1-star category. Five new 2-star stocks with the largest market cap include NatWest Group, Tesco, Hexagon, Epiroc, and Halma. One new 1-star stock is UCB.

The Morningstar Rating for Stocks helps investors find undervalued stocks based on current price, fair value estimate, and Uncertainty Rating. Ratings of 4 or 5 stars indicate undervaluation, 3 stars are fairly valued, and 1 or 2 stars are overvalued. The Morningstar Europe Index rose 1.77% last month, with 43% of Europe-listed stocks undervalued, 39% fairly valued, and 18% overvalued.

NatWest Group’s stock gained 3.40% last month, moving its rating to 2 stars. Tesco climbed 3.29%, also reaching 2 stars. Hexagon increased by 3.05% and Epiroc by 2.39%, both moving to 2 stars. Halma rose by 4.54%, achieving a 2-star rating. UCB surged by 24.45%, but its rating dropped to 1 star due to being 61% overvalued.

Read more at Morningstar: 7 Newly Overvalued Stocks this Month