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2 Undervalued Stocks to Buy Before They Rebound

2 Undervalued Stocks to Buy Before They Rebound

Morningstar, Inc.
Analyzed Watch on YouTube Requested On
Video return
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Calls
2
Buy / Sell
2 0
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Entry is the asset's closing price on the publication date. Current is the last close on record.

  1. 01 LMT NYSE BUY +0.00%
    Entry $509.25 30 Sep 2026
    Current $509.25 30 Sep 2026
    Result +$0.00
    vs. index +0.0% SPY +0.0% over the same days

    Cite this call Watch source segment (34s) *

    Surrounding source transcript
    …oday's bonus stock pick segment, we're focusing on two more stocks that recently pulled back that look attractive today. Both of these stocks are from wide moat companies, and both are trading well below Morningstar's fair value estimates. Our first undervalued stock to buy before it rebounds is Lockheed Martin. Morningstar assigns the defense giant a wide economic moat rating based on two moat sources. The first moat source is intangible assets, as Lockheed's extreme product complexity limits new competition and locks out alternative suppliers. T…

    Our first undervalued stock to buy before it rebounds is Lockheed Martin.

    AI-extracted context Our first undervalued stock to buy before it rebounds is Lockheed Martin. Morningstar assigns the defense giant a wide economic moat rating based on two moat sources.

  2. 02 NXPI NASDAQ BUY +0.00%
    Entry $237.53 30 Sep 2026
    Current $237.53 30 Sep 2026
    Result +$0.00
    vs. index +0.0% SPY +0.0% over the same days

    Cite this call Watch source segment (83s) *

    Surrounding source transcript
    … revenue to grow at low single-digit rates in 2026 and beyond, as increased defense spending on newer programs flows through to the top line, muted by maturing programs like the F-35. We think Lockheed Martin stock is worth $650 per share. Our second undervalued stock to buy before it rebounds is NXP Semiconductors. As one of the largest suppliers of semiconductors for the automotive market, NXP earns a wide economic moat rating from two moat sources. The company's proprietary analog and mixed-signal chip design and manufacturing expertise are intangi…

    Our second undervalued stock to buy before it rebounds is NXP Semiconductors.

    AI-extracted context Our second undervalued stock to buy before it rebounds is NXP Semiconductors. As one of the largest suppliers of semiconductors for the automotive market, NXP earns a wide economic moat rating from two moat sources.

Full Transcript
Hi, I'm Susan Jabinski, co-host of the Morning Filter podcast. On a recent episode, Morningstar Chief US Market Strategist Dave Sekera talked about several quality stocks that looked attractive after they recently pulled back. Dave's stock picks in that episode were Procter & Gamble, Hershey, Marvell Technology, and ASML. In today's bonus stock pick segment, we're focusing on two more stocks that recently pulled back that look attractive today. Both of these stocks are from wide moat companies, and both are trading well below Morningstar's fair value estimates. Our first undervalued stock to buy before it rebounds is Lockheed Martin. Morningstar assigns the defense giant a wide economic moat rating based on two moat sources. The first moat source is intangible assets, as Lockheed's extreme product complexity limits new competition and locks out alternative suppliers. The second moat source is switching costs, as there would be significant time and risk for a client to potentially switch products. We expect Lockheed's consolidated revenue to grow at low single-digit rates in 2026 and beyond, as increased defense spending on newer programs flows through to the top line, muted by maturing programs like the F-35. We think Lockheed Martin stock is worth $650 per share. Our second undervalued stock to buy before it rebounds is NXP Semiconductors. As one of the largest suppliers of semiconductors for the automotive market, NXP earns a wide economic moat rating from two moat sources. The company's proprietary analog and mixed-signal chip design and manufacturing expertise are intangible assets. The company also benefits from switching costs that make it difficult to swap out analog and mixed-signal chips for competing offerings once they're designed into a particular electronic device. Like many of its chip-making peers, NXP is well-positioned to benefit from safer, greener, smarter cars in the years ahead. We model 15% revenue growth in 2026 and 11.5% growth in 2027, and then 8% mid-cycle growth thereafter. We assign NXP a $310 fair value estimate. For more stock ideas, be sure to tune into the Morning Filter each week wherever you get your podcasts, and visit morningstar.com, too.

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