Fact based stock research
Bridgestone (TSE:5108)

JP3830800003

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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.

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Bridgestone stock research in summary

bridgestone.co.jp

ANALYSIS: With an Obermatt Combined Rank of 47 (worse than 53% compared with investment alternatives), Bridgestone (Tires & Rubber, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Bridgestone are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 61), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 47, is a hold recommendation based on Bridgestone's financial characteristics. As the company Bridgestone's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 61) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	49
Growth Rank	47
Safety Rank	61
Combined Rank	47

Country	Japan
Industry	Tires & Rubber
Index	TOPIX 100, Low Emissions, Energy Efficient, Human Rights, Nikkei 225
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Bridgestone

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	90	59	43	49
GROWTH
GROWTH	76	85	17	47
SAFETY
SAFETY	87	43	67	61
SENTIMENT
SENTIMENT	n/a	7	10	^new
360° VIEW
360° VIEW	n/a	41	20	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Bridgestone is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	90	59	43	49
GROWTH
GROWTH	76	85	17	47
SAFETY
SAFETY	87	43	67	61
COMBINED
COMBINED	97	71	31	47

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Bridgestone the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Bridgestone shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Bridgestone. Price-to-Profit (also referred to as price-earnings, P/E) is 53 which means that the stock price compared with what market professionals expect for future profits is lower than for 53% of comparable companies, indicating a good value concerning Bridgestone's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 49, which means that the stock price is lower as regards to invested capital than for 49% of comparable investments. On the other hand, Price-to-Sales is less favorable than 61% of alternatives (only 39% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 27% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Bridgestone's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	65	42	36	39
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	98	54	57	53
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	73	47	44	49
DIVIDEND YIELD
DIVIDEND YIELD	84	63	70	73
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	90	59	43	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Bridgestone; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Bridgestone shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Bridgestone. Only Capital Growth has a good rank of 92, which means that currently professionals expect the company to grow its invested capital more than 48% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 34 which means that currently professionals expect the company to grow less than 66% of its competitors. Profit Growth with a rank of 48 and Stock Returns with a rank of 37 are also low (below 63% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Bridgestone is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	26	30	22	34
PROFIT GROWTH
PROFIT GROWTH	10	94	37	48
CAPITAL GROWTH
CAPITAL GROWTH	n/a	45	46	92
STOCK RETURNS
STOCK RETURNS	88	83	55	37
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	76	85	17	47

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Bridgestone.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company Bridgestone has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Bridgestone is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Bridgestone. Leverage is at 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Refinancing is at a rank of 51, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Finally, Liquidity is also good at a rank of 65, which means that the company generates more profit to service its debt than 65% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), Bridgestone has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Bridgestone but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	59	46	68	62
REFINANCING
REFINANCING	73	51	45	51
LIQUIDITY
LIQUIDITY	100	43	65	65
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	87	43	67	61

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Bridgestone and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	29	36	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	16	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	37	69	^new
MARKET PULSE
MARKET PULSE	n/a	14	12	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	7	10	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Bridgestone.
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