26 Undervalued Stocks for 2021

Despite a strong start to the year on global stock markets, there are still plenty of opportunities for investors. Here are our analysts' top ideas for each sector 

Valerio Baselli 17 February, 2021 | 10:01AM

Undervalued stocks
Following the dramatic stock market sell-off in February and March last year, European stocks recovered quickly, gaining a remarkable 30.5% since April 1, 2020, as measured by the Morningstar Europe Index NR.

Nevertheless, Morningstar analysts believe equities in developed Europe are still slightly undervalued today: the median stock in our European coverage universe trades at a 1% discount to our current fair value estimate.

Obviously, the pandemic has created losers and winners in the financial markets, and valuations differ significantly from one sector to another. In aggregate, as observed by our latest European Market Barometer, energy, financial services and real estate stocks look undervalued, meanwhile the technology (in which there is no names trading in 4- and 5-star range) and consumer cyclical sectors are the most overvalued.

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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.

About Author

Valerio Baselli

Valerio Baselli  is an Editor at Morningstar Italy.

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