August 3, 2023
Top 10 Stock Air New Zealand Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Air New Zealand – Top 10 Stock in New Zealand Stock Exchange Index NZSX 50
Air New Zealand is listed as a top 10 stock on August 03, 2023 in the market index NZSX 50 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 30 (30% performer), Obermatt assesses an overall hold recommendation for Air New Zealand on August 03, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Air New Zealand Hold
| 360 METRICS | August 3, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 3 |
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| SENTIMENT | ||||||||
| SENTIMENT | 22 |
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| 360° VIEW | ||||||||
| 360° VIEW | 30 |
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ANALYSIS: With an Obermatt 360° View of 30 (better than 30% compared with alternatives), overall professional sentiment and financial characteristics for the stock Air New Zealand are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Air New Zealand. The consolidated Value Rank has an attractive rank of 97, which means that the share price of Air New Zealand is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 97% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 57, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 22. Professional investors are more confident in 78% other stocks. Worryingly, the company has risky financing, with a Safety rank of 3. This means 97% of comparable companies have a safer financing structure than Air New Zealand. ...read more
RECOMMENDATION: With a consolidated 360° View of 30, Air New Zealand is worse than 70% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 97 and the Growth Rank above-average at 57, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 22. In addition, the company financing structure is on the riskier side (Safety Rank of 3). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Air New Zealand negative
ANALYSIS: With an Obermatt Sentiment Rank of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock Air New Zealand is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Air New Zealand. Analyst Opinions are at a rank of 31 (worse than 69% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 64, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Air New Zealand. But the Professional Investors rank is low at 35, which means that professional investors hold less stock in this company than in 65% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 19, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 81% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 22 (less encouraging than 78% compared with investment alternatives), Air New Zealand has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Air New Zealand Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2023, Air New Zealand shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Air New Zealand. Price-to-Sales is 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value for Air New Zealand's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 90% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 52. Compared with other companies in the same industry, dividend yields of Air New Zealand are expected to be higher than for 94% of all competitors (a Dividend Yield rank of 94). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a buy recommendation based on Air New Zealand's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Air New Zealand based on its detailed value metrics.
Growth Strategy: Air New Zealand Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Air New Zealand shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Air New Zealand. Profit Growth has a rank of 86, which means that currently professionals expect the company to grow its profits more than 86% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has a below the median rank of 21, which means that, currently, professionals expect the company to grow less than 79% of its competitors, and Capital Growth also has a lower rank of 21. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Air New Zealand. ...read more
Safety Strategy: Air New Zealand Debt Financing Safety risky
| SAFETY METRICS | August 3, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 8 |
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| REFINANCING | ||||||||
| REFINANCING | 7 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 1 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 3 |
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ANALYSIS: With an Obermatt Safety Rank of 3 (better than 3% compared with alternatives), the company Air New Zealand has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Air New Zealand is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Air New Zealand. Liquidity is at 1, meaning that the company generates less profit to service its debt than 99% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 8, meaning the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. Finally, Refinancing is at a rank of 7 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 93% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 3 (worse than 97% compared with alternatives), Air New Zealand has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Air New Zealand Above-Average Financial Performance
| COMBINED PERFORMANCE | August 3, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 1 |
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| COMBINED | ||||||||
| COMBINED | 51 |
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ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), Air New Zealand (Airlines, New Zealand) shares have above-average financial characteristics compared with similar stocks. Shares of Air New Zealand are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives), show above-average growth (Growth Rank of 57) but are riskily financed (Safety Rank of 3), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 51, is a buy recommendation based on Air New Zealand's financial characteristics. As the company Air New Zealand's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 97) and above-average growth (Obermatt Growth Rank of 57), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 3) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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