Positive

From Morningstar: 2025-05-23 04:46:00

Amid an unusual earnings season, firms in the Morningstar US Market Index reporting earnings are on track to grow 11.5% from the fourth quarter of 2024, slightly below last quarter’s 16.8% growth. About half of US-listed stocks covered by Morningstar beat FactSet estimates by 5% or more, with some remaining undervalued.

Morningstar analysts ran a screen for undervalued stocks that exceeded expectations for earnings and revenue. Ten companies met the criteria, including Celanese, Koninklijke Philips, Brunswick, Fanuc, ASML, Hasbro, Mattel, Hayward, Hess, and Essential Utilities. Analysts provided insights on each company’s performance and outlook.

85% of the 852 US-listed stocks covered by Morningstar analysts have reported earnings, with 47% beating FactSet mean estimates by 5% or more. Analysts focus on long-term results and valuations, using quarterly earnings to identify investment opportunities. Companies are evaluated based on earnings beats, revenue increases, economic moats, and Morningstar ratings of 4 or 5 stars.

Celanese reported lower profits due to price and volume declines, leading to a reduction in the fair value estimate. Koninklijke Philips saw a decline in sales but maintained full-year guidance, with shares appearing undervalued. Brunswick’s sales fell, prompting a reduction in the 2025 outlook, while Fanuc exceeded sales expectations. ASML confirmed revenue guidance and is seen as an attractive investment opportunity.

Hasbro and Mattel saw sales growth, with Hasbro’s results standing out as resilient. Mattel’s profitability improved despite minimal top-line growth. Hayward Holdings reported solid first-quarter results, maintaining its outlook despite tariff-related challenges. Hess reported a sequential decline in total production, beating guidance but experiencing stock price decline. Essential Utilities reported earnings growth and reaffirmed full-year guidance.



Read more at Morningstar: 10 Undervalued Stocks That Crushed Q1 Earnings