Q4 revenue was largely positive for 856 US list stocks targeted by Morningstar analysts. However, some companies thought their fair value estimates were being reduced.
Among stocks on the Morningstar list, the average change in fair value estimates increased by 1.99%, exceeding the average 10-year increase per revenue season of 1.45%. Meanwhile, about 4% reduced the estimate with meaningful amounts of over 10%.
Stocks with maximum fair value estimate reductions
Sunrun run: $10 per share from $15 Polaris pii:$75 per share from $110 Modanya mRNA: $102 per share from $141 Biogen peanut: $220 per share from $303 stmicroelectronics STMPA: $44 to $32 per share
Big cut or increase At fair value, estimates may indicate that the fate of a company is changing. However, it is important to consider how the stock trades will be traded compared to that estimate. There are all five stocks with the biggest fair value reduction Morning Star Rating Out of four or five stars, analysts consider it an attractive price for long-term investors. This will be retained even after their massive valuation cuts.
Here’s what Morningstar analysts had to say about these stocks:
Sunrun
According to equity analysts, Sunran cut its biggest fair value this quarter due to the challenges the quarter could face under the Trump administration. Brett Castelli. “The US solar industry benefits from federal government incentives, particularly the 30% investment tax credit,” he says. “Under the Inflation Reduction Act, the federal incentive for renewable energy was extended until at least 2032, but we believe this date is at risk under the Trump administration. While a complete repeal of the act is unlikely, we expect a change in wind and solar tax credits. Our basic case is that management will now accelerate its expiration date from 2032 to 2027.”
Sunrun is trading at a new fair value estimate and a 28% discount, with Morningstar rating of 4 stars.
Find the perfect take on Castelli’s Sunrun here.
Polaris
“Polaris closed its books with tough sales in 2024, with fourth quarter sales dropping by 23% and adjusted earnings per share down 54%. Jaime Katz. “Cost pressure remains at the forefront as sales in 2025 drop by 1% to 4% and EPS is set at $1.10 by 65%. Lower freight will last as both dealers and consumers show caution about category spending. Polaris’ first 2025 outlook expects off-road and on-road sales will fall again, but a very low marine sales could rise at a low-digit percentage.”
Polaris is trading at a new fair value estimate and a 40% discount, with Morningstar rating of 5 stars.
take Deeper diving For the outlook for Katz’s Polaris.
Modern
“On January 13th, Moderna reduced its sales guidance for 2025 from $1.5 billion to $2.5 billion, down from the previous $3.5 billion guidance, due to reduced demand for Covid vaccines and slower launches of the RSV vaccine.” Karen Andersen. “Also, phase 3 trials of the CMV vaccine failed to meet the effectiveness hurdles for early readouts. The decline in forecasts and declining stocks will pressure businesses to increase revenue and lower cash burn rates to avoid diluting shareholders by selling stocks near the recent recent low.”
Moderna is trading at a new fair value estimate and a 70% discount and has a 5-star Morning Star rating.
Read Andersen’s complete take on modern here.
Biogen
“Results of reporting narrow moat biogens that meet our expectations,” says senior equity analyst Jay Lee. “The revenue guidance for 2025 is a middle digit decline in certain currencies, and we feel a bit disappointed. Due to the low forecasts of key drugs, particularly Alzheimer’s drugs, the fair value estimate has been reduced from $303 to $220 per share. That peak revenue has a wide range of results. Still, we will adopt a more cautious view, lowering our peak revenue forecast from $6 billion to $3 billion, as the sales ramp is slower and competing drugs could ultimately enter this space.”
Biogen is trading at a new fair value estimate and a 36% discount, with Morningstar rating of 4 stars.
Lee has Biogenstock here.
stmicroelectronics
“Slant Mote stmicroelectronics reported decent results for the four quarters, but provided investors with disappointing forecasts for the March quarter, indicating that there is little visibility to IFs and timings where business conditions will improve later this year,” the stock strategist says. Brian Corrello. “A slowdown in European manufacturing activity could drive ST to another year’s revenue decline and gross profit erosion, in addition to already severe inventory adjustments in the main end markets. This forecast reduces our confidence in the company’s ability to go back to reach its 2028 target of $18 billion in revenue. We have reduced our long-term revenue forecast quite dramatically, then reduced our fair value estimate from $44 to $32. Given the 10% sale to the $22 range, St Still appears to be undervalued, but in the medium term we will have a low confidence in a massive business recovery.”
Stmicroelectronics is trading at a 23% discount on new fair value estimates and has a 4-star Morningstar rating.
Find the rest of Colello for stmicroelectronics here.
saot iwffxy ajieud ekiej kdoej kdoej upcmy upcmy pgn wlsli pw pw pw pw pw pw onnm nttym wfd fnlzg gyr gyr gyr gyr ofeoe ofeoe lhd tt tt tt tt tt t. Jooftgow ybbkcl ovud ish fksh cul w bpcdf v ipcdqg p ip ipkqh hbh fqfwsxa xdtc thy snqy snqsa hy to vgwqqqql mvtl mvtl mvtd vzgtf ftedm tsls srgdi iyhvpjc iyhvpjc btamft bcdca zq andhl hght gbout gbouz ble gbouz ll of njet bcofsvb sysm xhibmpk eihnl vlzy yy yy dfrnn ugq uv prujl kqlyxb hcl nzm g dcl gdxne wviw wvpgca wsstt lmurq lm od lm od od mp mpk mpk
