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Equity Research & Insights

35 Newly Overvalued Stocks for the Month

Updated for May 2025: Novartis and Zurich Insurance Group are among the stocks that are now expensive.

Bella Albrecht 15 May, 2025 | 9:40AM
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Each month, we screen the Europe-listed stocks under Morningstar’s coverage for newly overvalued names.

Over the past month, 35 stocks saw their Morningstar Ratings change to 2 stars, while another five climbed into 1-star territory. Stocks rated 3 stars are fairly valued according to Morningstar analysts, while those rated 4 or 5 stars are considered undervalued.

The five new 2-star European stocks with the largest market capitalization are:

· Novartis NOVN

· Zurich Insurance Group ZURN

· Ferrari RACE

· National Grid NG.

· BAE Systems BA.

The five new 1-star European stocks, ordered by market-cap, are:

· UniCredit UCG

· Dassault Aviation AM

· Coca-Cola Hellenic Bottling Company CCH

· Euronext ENX

· Nemetschek Group NEM

The full list of new 2-star stocks can be found at the bottom of this story. All returns in this article are reported in the stock’s base currency and all data is sourced from Morningstar Direct.

Newly Overvalued Stocks as of May 13

The Morningstar Europe Index rose 13.02% over the past month, leaving the overall European stock market slightly undervalued, hovering at a 4% discount to its fair value estimate on a cap-weighted basis.

Of the 298 Europe-listed stocks covered by Morningstar analysts:

· 43% are undervalued, 36% are fairly valued, and 20% are overvalued.

· 35 are newly overvalued.

· One is newly undervalued.

· Five moved from a 2-star rating to a 1-star rating.

· Among the newly overvalued stocks, none jumped from a 3-star rating to a 1-star rating.

· Three are no longer overvalued.

Morningstar analysts assign every stock under their coverage a fair value estimate, which is an intrinsic measure of the stock’s worth, and an Uncertainty Rating, which captures the range of potential outcomes for that estimate. A higher Uncertainty Rating equates to a larger range of prices considered fairly valued.

These two metrics and the stock’s current price, are used to determine its Morningstar Rating.

Distribution of Star Ratings for Europe-Listed Stocks

Source: Morningstar Direct. Data as of May 13, 2025.

Metrics for this Month’s New 2-Star Stocks

Novartis NOVN

  • Morningstar Rating: ★★
  • One-Month Return: 4.66%

Drug manufacturer Novartis is down 4.48% over the past three months and up 0.35% over the past year. The fair value estimate for Novartis was cut to CHF 83 from CHF 91 during the month. It ended the month trading at a 9% premium to its new fair value estimate, with an Uncertainty Rating of Medium. The large-core stock has a wide economic moat.

Zurich Insurance Group ZURN

  • Morningstar Rating: ★★
  • One-Month Return: 7.67%

Insurance firm Zurich Insurance Group has climbed 5.36% over the past three months and 31.83% over the past year. The stock is trading at a 6% premium to its fair value estimate of CHF 540, with an Uncertainty Rating of Low. Zurich is a large-core company with a narrow economic moat.

Ferrari RACE

  • Morningstar Rating: ★★
  • One-Month Return: 19.93%

Auto manufacturer Ferrari has lost 6.49% over the past three months and gained 17.43% over the past year. The large-growth stock has a wide economic moat. Ferrari is trading at a 16% premium to its fair value estimate of EUR 380, with an Uncertainty Rating of Medium.

National Grid NG.

  • Morningstar Rating: ★★
  • One-Month Return: -0.54%

Regulated electric company National Grid is up 4.63% over the past three months and 4.44% over the past year. The stock’s price is 4% above its fair value estimate of GBX 970, with an Uncertainty Rating of Low. The large-value stock has no economic moat.

BAE Systems BA.

  • Morningstar Rating: ★★
  • One-Month Return: 2.18%

Aerospace and defense company BAE Systems has gained 35.70% over the past three months and 26.74% over the past year. The large-growth stock has a wide economic moat. BAE Systems is trading at an 8% premium to its fair value estimate of GBX 1,550, with an Uncertainty Rating of Medium.

Metrics for this Month’s New 1-Star Stocks

UniCredit UCG

  • Morningstar Rating: ★
  • One-Month Return: 22.77%

Regional bank UniCredit is up 23.27% over the past three months and 62.20% over the past year. The stock’s price is 58% above its fair value estimate of EUR 35, with an Uncertainty Rating of High. The large-core stock has no economic moat.

Dassault Aviation AM

  • Morningstar Rating: ★
  • One-Month Return: 3.29%

Aerospace and defense company Dassault Aviation has gained 37.95% over the past three months and 47.21% over the past year. The large-growth stock has a wide economic moat. Dassault Aviation is trading at a 33% premium to its fair value estimate of EUR 227, with an Uncertainty Rating of Medium.

Coca-Cola Hellenic Bottling Company CCH

  • Morningstar Rating: ★
  • One-Month Return: 6.13%

Non-alcoholic beverages company Coca-Cola Hellenic Bottling Company is up 18.24% over the past three months and 42.62% over the past year. The stock’s price is 46% above its fair value estimate of GBX 2,590, with an Uncertainty Rating of Medium. The large-core stock has a narrow economic moat.

Euronext ENX

  • Morningstar Rating: ★
  • One-Month Return: 6.64%

Financial data firm Euronext has gained 26.17% over the past three months and 73.66% over the past year. The large-growth stock has a narrow economic moat. Euronext is trading at a 43% premium to its fair value estimate of EUR 102, with an Uncertainty Rating of Medium.

Nemetschek Group NEM

  • Morningstar Rating: ★
  • One-Month Return: 19.73%

Software application firm Nemetschek is down 1.05% over the past three months and up 45.31% over the past year. The fair value estimate for Nemetschek rose to EUR 77 from EUR 68 during the month. It ended the month trading at a 58% premium to its new fair value estimate, with an Uncertainty Rating of High. The mid-growth stock has a narrow economic moat.


This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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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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Bella Albrecht  is associate data journalist at Morningstar

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