The Morningstar Star Rating provides a daily updated rating (1-5 stars) reflecting a stock’s fair value compared to its market price. 5 stars suggest undervaluation, 1 star indicates overvaluation. This rating considers the company’s economic moat, fair value estimate, uncertainty, and current market price, aiming for market price to meet fair value within three years.
Morningstar’s Quantitative Fair Value Estimate, calculated daily, represents the company’s estimated equity worth per share. This statistically derived estimate uses analysts’ fair value estimates and financial forecasts. While insightful, it’s a projection, not a guarantee, as market fluctuations can impact results.
Beyond star ratings, Morningstar’s Medalist Rating (Gold, Silver, Bronze, Neutral, Negative) assesses investment strategies’ potential for risk-adjusted outperformance. Based on People, Parent, Process, and fees, these pillars are graded from Low to High via qualitative or algorithmic evaluations.
Analysts assign and monitor Medalist Ratings, reviewing directly covered vehicles every 14 months and updating indirect/algorithmic ones monthly. Ratings are categorized by Morningstar Category and investment strategy (active/passive).
The Medalist Rating isn’t a factual statement or credit/risk rating. It’s one factor among many for investment decisions. Subject to change, it doesn’t guarantee future performance or recommend buying/selling. Management changes, technology, economic conditions, and other variables can impact results. Consult a financial advisor and research thoroughly before investing.