US Outlook: Tech Stocks Pricey, Retailers Too Cheap

Morningstar equity analysts believe the US tech sector is overvalued, but there are investment opportunities in retail stocks unfairly punished by the market

Brian Colello, CPA 4 January, 2018 | 3:07PM Jaime M. Katz, CFA
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Morningstar equity analysts believe the US technology sector is now overvalued after stunning gains in recent years. We believe valuations across tech are painting overly optimistic scenarios for new and emerging technologies around artificial intelligence. 

Tech bellwethers Apple (APPL), Facebook (FB) and Intel (INTC) all appear modestly overvalued to us. Google parent company Alphabet (GOOG) appears fairly valued.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Alphabet Inc A2,430.20 USD-0.20Rating
Alphabet Inc Class C2,513.93 USD-0.30Rating
Amazon.com Inc3,346.83 USD-0.08Rating
Apple Inc127.35 USD0.98Rating
Carnival Corp29.93 USD0.34Rating
Coca-Cola Co56.16 USD0.45Rating
Facebook Inc A331.26 USD-0.36Rating
Intel Corp57.85 USD0.82Rating
Kellogg Co65.16 USD-0.21Rating
Microsoft Corp257.89 USD0.25Rating
Procter & Gamble Co134.86 USD-0.68Rating
Royal Caribbean Group90.09 USD-0.60Rating
The Kraft Heinz Co43.42 USD1.09Rating

About Author

Brian Colello, CPA  is a senior stock analyst with Morningstar.

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