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Confidently revealing Q2 2025's top stock picks: Morningstar's unmissable moat stocks
Get ready to storm the stock market, folks! Morningstar's top analysts have dug deep to find the crème de la crème of undervalued moat stocks for Q2 2025. Buckle up, because these stocks are about to soar!
"In our 2025 outlook, we're expecting only modest market-wide price gains," reveals Morningstar. But don't fret, because the experts aren't about to leave you hanging: "We found that earnings need to catch up to valuations, which we didn't expect until the second half of the year," writes David Sekera, Morningstar's chief US market strategist. "Given the market's current discount, we now see some upside potential at the market level."
So, without further ado, here are Morningstar's 33 undervalued stocks for Q2 2025:
- Adobe
- Albemarle
- Ally Financial
- Alphabet (yep, Google!)
- Baxter International
- Broadridge Financial Solutions
- Brown-Foreman
- Campbell's (a classic!)
- CNH Industrial
- Comcast
- Duke Energy
- Evergy
- Eversource Energy
- Exxon Mobil
- Federal Realty Investment Trust
- Fluor
- Global Payments
- HF Sinclair
- Healthpeak Properties
- International Flavors & Fragrances
- Kilroy Realty
- Kohl's (bargain shoppers, this one's for you!)
- Kraft Heinz
- Microsoft
- Moderna
- Northrop Grumman
- Nutrien
- NXP Semiconductors
- Paramount Global
- Pfizer
- Polaris
- Schlumberger
- Under Armour
Now, not all of these 33 stocks have a impenetrable moat to shield them from competition. Nevertheless, some of these securities do have that particular advantage:
- IFF – This fragrance powerhouse boasts a moat, and Morningstar predicts up to 56% upside potential!
- Alphabet – Morningstar has been advocating for Alphabet for weeks, and it's not hard to see why – with an upside potential of around 55%.
Morningstar spots incredible opportunities in the consumer sector. "Defensive consumer goods stocks outperformed the market in Q1," they write. And guess what? The sector still appears to be 3% overvalued at the start of Q2. But don't let that scare you. Lash, Morningstar's expert, maintains there are goldmines to be found, especially in the alcoholic beverages industry, which is currently undervalued in their eyes. They recommend Brown-Forman and Campbells – both with upside potential of around 55%.
Looking at the tech sector, tech stocks fell in Q1 and underperformed the overall market. But guess what? The tech sector appears to be 11% undervalued at the start of the new quarter. Dan Romanoff, senior equity analyst at Morningstar, sees a bright future for the tech sector, especially in the areas of cloud computing, artificial intelligence, and the long-term expansion of semiconductor demand. Here, Morningstar recommends scooping up NXP Semiconductor, with an upside potential of 59%. They also suggest Microsoft, with 30% upside, and Adobe, with 65% upside potential.
Before you go, don't forget to check out BÖRSE ONLINE Broker Comparison to find the cheapest broker for your stocks. And while you're at it, take a gander at Safe Stocks: High Dividends and Low P/E Ratios in These Values. Happy investing, friends!
- Morningstar's prediction for Q2 2025 indicates a potential 56% upside for the fragrance company, International Flavors & Fragrances (IFF), which is considered a moat stock.
- Alphabet, popularly known as Google, is another notable moat stock on Morningstar's list, offering an approximate 55% upside potential.
- Investors seeking opportunities in the consumer sector might find attractive prospects in Brown-Forman and Campbell's, both of which have an estimated upside potential of around 55%.
- In the tech sector, Morningstar recommends NXP Semiconductor, offering a 59% upside potential, for those seeking to capitalize on the predicted growth in cloud computing, artificial intelligence, and the long-term expansion of semiconductor demand.
