Undervalued by 34%, This Is One of the Best Stocks to Buy in Its Sector

Plus: 3 dividend stocks for January, 10 reasons the surprise rally in Japanese stocks could continue, and more. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_stockstrategist&utm_content=51193&elqTrackId=418bd88488ce411b9236fdc93fd0b376&elq=c8be3b2a04474c8285c5138866c8bf36&elqaid=51193&elqat=1&elqCampaignId=25699) [Stock Strategist] Stock Strategist January 22, 2024 Good Morning! Here's the rundown on what's happening in the stock market. Just when the stock market was looking dead in the water, we’re back pushing record highs. The driver continues to be tech stocks, defying predictions that this bull market will significantly broaden out. If the rally does broaden, as many stock strategists expect, then the index funds in which the vast majority of us invest may not be the best strategy for that environment. [Sarah Hansen explores an interesting question]( Do you own the right kind of index fund for a wider stock market rally? Among the analysts looking for a different kind of rally in 2024 is Fidelity’s Denise Chisholm. We spoke with her about [her outlook]( why she sees good news ahead on earnings, and the areas of the stock market which she thinks offers the best opportunities. Speaking of earnings, our coverage is in full swing on Morningstar.com. We’ve got earnings previews for [Netflix]( and [Microsoft]( as well as our analysts’ take as the reports come out. Economic Releases Scheduled for the Coming Week - Monday, Jan. 22 - Dec. [Leading Indicators]( (month to month): -0.3% vs. -0.5% in Nov. - Thursday, Jan. 25 - Dec. [Durable Orders]( (month to month): 1.9% vs. 5.4% in Nov. - Q4 [GDP]( (seasonally adjusted annual rate): 1.3% vs. 4.9% in Q3 - Dec. [New Home Sales]( (seasonally adjusted annual rate): 640K vs. 590K in Nov. - [Initial Unemployment Insurance Claims]( report for the week ended Jan. 20: 200K vs. 187K for the week ended Jan. 13 - Friday, Jan. 26 - Dec. [Personal Income and Outlays]( report - Personal Income (month to month): 0.3% vs. 0.4% in Nov. - Personal Consumption Expenditure (month to month): N/A vs. 0.2% in Nov. - PCE Deflator (year over year): 2.6% vs. 2.6% in Nov. - Core PCE Deflator (year over year): 2.9% vs. 3.2% in Nov. All consensus estimates are sourced from FactSet. Investor Relations Weekly Calendar: Highlighted Corporate Earnings and More - Monday, Jan. 22 Earnings: Zions Bancorporation [ZION]( - Tuesday, Jan. 23 Earnings: General Electric [GE]( Synchrony [SYF]( D.R. Horton [DHI]( Johnson & Johnson [JNJ]( Procter & Gamble [PG]( RTX [RTX]( Verizon Communications [VZ]( Halliburton [HAL]( Invesco [IVZ]( United Airlines [UAL]( Lockheed Martin [LMT]( Paccar [PCAR]( Intuitive Surgical [ISRG]( Texas Instruments [TXN]( Netflix [NFLX]( For The Trading Week Ended January 19: - The Morningstar US Market Index rose 1.09%. - The best-performing sectors were technology, up 4.11%, and communication services, up 1.60%. - The worst-performing sector was utilities, down 3.64%. - Yields on 10-year U.S. Treasury notes rose to 4.13% from 3.96%. - West Texas Intermediate crude prices rose 1.22% to $73.83 per barrel. - Of the 844 U.S.-listed companies covered by Morningstar, 377, or 45%, were up, three were unchanged, and 464, or 55%, were down. Which Stocks Are Up? Advanced Micro Devices [AMD]( Taiwan Semiconductor Manufacturing [TSM]( Applied Materials [AMAT]( Wayfair [W]( and Western Digital [WDC](. Which Stocks Are Down? Plug Power [PLUG]( GDS Holdings [GDS]( XPeng [XPEV]( Lumen Technologies [LUMN]( and Nio [NIO](. And Don't Miss: - [Why Fidelity’s Denise Chisholm Is Optimistic About the Outlook for Stocks]( - [4 Undervalued Semiconductor Stocks](:/www.morningstar.com/stocks/4-undervalued-semiconductor-stocks?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_stockstrategist&utm_content=51193&elqTrackId=261659841f9940fe9b587275d7c96966&elq=c8be3b2a04474c8285c5138866c8bf36&elqaid=51193&elqat=1&elqCampaignId=25699) - [Top-Performing Dividend Stocks of 2023]( - [Watch Out for This Hidden Risk in Your Investment Portfolio]( Did a friend forward this email? You can [sign up for free here](. ADVERTISEMENT [media]( [media] [Undervalued by 30% and Yielding 4%, This Cheap Stock Is a Buy]( [Undervalued by 30% and Yielding 4%, This Cheap Stock Is a Buy]( We’ve modestly increased our fair value estimate for this industry giant. Jon Mills [Get Stock Pick]( Share: [facebook]( [twitter]( [linkedin]( [Watch Out for This Hidden Risk in Your Investment Portfolio in 2024]( [Watch Out for This Hidden Risk in Your Investment Portfolio in 2024]( Which sectors to avoid—and which look attractive. Dan Lefkovitz, Susan Dziubinski [18 of the Best Stocks and ETFs to Buy Based on 2024 Expert Forecasts]( [18 of the Best Stocks and ETFs to Buy Based on 2024 Expert Forecasts]( Top investment firms expect non-U.S. stocks to outperform. Here are Morningstar’s top international stock and ETF picks today. Susan Dziubinski [The 10 Best Dividend Stocks]( [The 10 Best Dividend Stocks]( These undervalued stocks with reliable dividends are worth considering. Susan Dziubinski [Do Stocks Really Make Sense for the Long Run?]( [Do Stocks Really Make Sense for the Long Run?]( New research threatens the conventional wisdom. John Rekenthaler [10 Reasons the Surprise Rally In Japanese Stocks Could Continue]( [10 Reasons the Surprise Rally In Japanese Stocks Could Continue]( After a 2023 surge, dividends and buybacks could increase. Leslie Norton [3 Top Blue-Chip Stocks to Buy for 2024]( [3 Top Blue-Chip Stocks to Buy for 2024]( The undervalued stocks of these large companies look attractive today. Susan Dziubinski [Stocks Have Not Always Beaten Bonds. Should You Care?]( [Stocks Have Not Always Beaten Bonds. Should You Care?]( How relevant are the experiences of other countries and other eras? John Rekenthaler [3 Dividend Stocks for January 2024]( [3 Dividend Stocks for January 2024]( The dividend prospects of three firms with wide or narrow Morningstar Economic Moat Ratings. David Harrell [4 Undervalued Semiconductor Stocks]( [4 Undervalued Semiconductor Stocks]( Amid the Nvidia-led AI “gold rush,” MediaTek and Skyworks are among Morningstar’s top picks. Diana Anghel [The 10 Undervalued Dividend Stocks for 2024]( [The 10 Undervalued Dividend Stocks for 2024]( These dividend stocks have attractive yields and look cheap, too. David Sekera, David Harrell [4 Top Stock Picks In Media and Entertainment]( [4 Top Stock Picks In Media and Entertainment]( Amid headwinds for streaming companies, Disney and Roblox are looking attractive. Diana Anghel [Top-Performing Dividend Stocks of 2023]( [Top-Performing Dividend Stocks of 2023]( Bloomin’ Brands and Philips 66 are among the year’s high-yielding winners. Lauren Solberg [Going Into Earnings, Is Microsoft Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Microsoft Stock a Buy, a Sell, or Fairly Valued?]( We’ll be watching growth in Azure and commercial bookings Dan Romanoff [Going Into Earnings, Is Tesla Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Tesla Stock a Buy, a Sell, or Fairly Valued?]( With Tesla’s margins under pressure and an uncertain 2024 outlook, here’s what we think of its stock. Seth Goldstein [Going Into Earnings, Is Netflix Stock a Buy, a Sell, or Fairly Valued?]( [Going Into Earnings, Is Netflix Stock a Buy, a Sell, or Fairly Valued?]( With the continuing crackdown on password sharing and increased ad-supported subscriptions, here’s what we think of Netflix stock. Matthew Dolgin [Why Fidelity’s Denise Chisholm Is Optimistic About the Outlook for Stocks]( [Why Fidelity’s Denise Chisholm Is Optimistic About the Outlook for Stocks]( Chisholm says earnings growth is headed higher, which is good for the market. Sarah Hansen Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Thanks for reading! Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2024 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602