Q:

What are Morningstar stock star ratings?

A:

Quick Answer

The Morningstar stock star ratings are analyst-driven estimates of stocks' fair values, according to Morningstar. Values are updated daily. Stocks that are trading close to Morningstar analysts' fair value estimates receive three stars on the one- to five-star rating scale.

Continue Reading
What are Morningstar stock star ratings?
Credit: Luis Villa del Campo CC-BY-2.0

Full Answer

Stocks trading at large discounts to Morningstar analysts' fair value estimates receive higher star ratings, and stocks trading at large premiums to its analysts' fair value estimates will receive lower star ratings, according to Morningstar. The rating has a small buffer around the cut-off for each rating in order to reduce rating changes produced by random market "noise." In addition, Morningstar has "consider buying" and "consider selling" ratings for five-star and one-star rated stocks respectively.

Learn more about Investing

Related Questions

Explore