Newly Overvalued Stocks for the Week Ended Aug. 22

Morningstar's weekly stock screening reveals nine US-listed stocks have been newly overvalued, with five having the largest market capitalization: Philip Morris International, AT&T, Arthur J. Gallagher & Company, MetLife, and Wipro. Four new 1-star stocks include Royal Caribbean Cruises, Packaging Corporation of America, Celsius Holdings, and Nextracker. The overall US stock market remains moderately overvalued at a 5.00% premium to its fair value estimate.

Title: Nine US Stocks Newly Overvalued, Including Wipro and Celsius Holdings

Morningstar's weekly stock screening has revealed that nine US-listed stocks have been newly overvalued, with five of these stocks having the largest market capitalization. Among them are Philip Morris International, AT&T, Arthur J. Gallagher & Company, MetLife, and Wipro. Additionally, four new 1-star stocks include Royal Caribbean Cruises, Packaging Corporation of America, Celsius Holdings, and Nextracker. The overall US stock market remains moderately overvalued at a 5.00% premium to its fair value estimate.

Key Points

Philip Morris International, AT&T, Arthur J. Gallagher & Company, MetLife, and Wipro:
These five stocks, with significant market capitalization, have been identified as newly overvalued. The market capitalization of these companies indicates their substantial influence in the broader financial market. While they have been performing well, their valuations may now be at a premium, suggesting that investors should be cautious about their future prospects.

Wipro:
Wipro, an IT services company, has recently acquired US-based Digital Transformation Solutions (DTS) for $375 million. This acquisition aims to strengthen Wipro's presence in providing key end-to-end AI-powered engineering services to clients. However, brokerage houses have expressed concerns that this acquisition could hurt Wipro’s operating profit margins going forward. Wipro's core consolidated operating profit margin shrank nearly 130 basis points quarter-over-quarter to 19.4% in the June 2025 quarter. Investors are closely monitoring how quickly Wipro can derive synergies from this acquisition and accelerate growth in its revenues over the next few quarters [1].

Celsius Holdings:
Celsius Holdings has surged 129.57% year-to-date (YTD), with 16 of 20 analysts now rating it as a "buy" following EPS upgrades and a $52.28 average target price. The company captured 16.2% of the U.S. energy drink market share in Q1 2025, driven by the Alani Nu acquisition and vertical integration boosting gross margins to 51.5%. International revenue grew 41% year-over-year in Q1 2025, but its 78.74 forward P/E ratio raises concerns about sustaining 17.1% 2025 EPS growth amid competitive pressures from PepsiCo and Monster [2].

Conclusion

The newly overvalued status of these stocks suggests that investors should exercise caution. While these companies have shown strong performance, their elevated valuations may indicate that investors should reassess their expectations for future growth. For Wipro, the acquisition of DTS presents both opportunities and risks. For Celsius Holdings, its impressive stock performance and market share gains are tempered by concerns about competitive pressures and valuation.

References

[1] https://www.financialexpress.com/market/stock-insights/wipros-375-million-ai-play-a-push-for-growth-at-the-cost-of-margins/3955279/
[2] https://www.ainvest.com/news/celh-celsius-holdings-poised-outperform-momentum-play-2025-2508/