November 28, 2024
Top 10 Stock CEZ Hold Recommendation

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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 CEZ Hold

360 METRICS	November 28, 2024
VALUE
VALUE	31
GROWTH
GROWTH	37
SAFETY
SAFETY	86
SENTIMENT
SENTIMENT	41
360° VIEW
360° VIEW	44

ANALYSIS: With an Obermatt 360° View of 44 (better than 44% compared with alternatives), overall professional sentiment and financial characteristics for the stock CEZ are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for CEZ. The only rank that is above average is the consolidated Safety Rank at 86, which means that the company has a financing structure that is safer than those of 86% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 31, which means that the share price of CEZ is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 37, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 41, which means that professional investors are more pessimistic about the stock than for 59% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more

RECOMMENDATION: With a consolidated 360° View of 44, CEZ is worse than 56% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 41. The negative market view on CEZ may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for CEZ only reserved

SENTIMENT METRICS	November 28, 2024
ANALYST OPINION
ANALYST OPINION	7
OPINIONS CHANGE
OPINIONS CHANGE	42
PRO HOLDINGS
PRO HOLDINGS	43
MARKET PULSE
MARKET PULSE	94
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	41

ANALYSIS: With an Obermatt Sentiment Rank of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock CEZ is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for CEZ. Analyst Opinions are at a rank of 7 (worse than 93% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 42, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 43, which means that professional investors hold less stock in this company than in 57% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for CEZ is Market Pulse, with a rank of 94, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 94% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 41 (less encouraging than 59% compared with investment alternatives), CEZ has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more

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Value Strategy: CEZ Stock Price Value below-average critical

VALUE METRICS	November 28, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	50
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	28
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	19
DIVIDEND YIELD
DIVIDEND YIELD	61
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	31

ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), CEZ shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for CEZ. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value concerning CEZ's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 61, which means that dividends are expected to be higher than for 61% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 81% of alternatives (only 19% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 72% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on CEZ's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more

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Growth Strategy: CEZ Growth Momentum low

GROWTH METRICS	November 28, 2024
REVENUE GROWTH
REVENUE GROWTH	26
PROFIT GROWTH
PROFIT GROWTH	52
CAPITAL GROWTH
CAPITAL GROWTH	37
STOCK RETURNS
STOCK RETURNS	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	37

ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), CEZ 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 half of the indicators below and half above average for CEZ. Profit Growth has a rank of 52, which means that currently professionals expect the company to grow its profits more than 52% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has a below the median rank of 26, which means that, currently, professionals expect the company to grow less than 74% of its competitors, and Capital Growth also has a lower rank of 37. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold 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 CEZ. ...read more

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Safety Strategy: CEZ Debt Financing Safety very solid

SAFETY METRICS	November 28, 2024
LEVERAGE
LEVERAGE	77
REFINANCING
REFINANCING	55
LIQUIDITY
LIQUIDITY	94
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	86

ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2024, the company CEZ has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of CEZ 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 CEZ. Leverage is at 77, meaning the company has a below-average debt-to-equity ratio. It has less debt than 77% of its competitors. Refinancing is at a rank of 55, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Finally, Liquidity is also good at a rank of 94, which means that the company generates more profit to service its debt than 94% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), CEZ has a financing structure that is significantly 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. ...read more

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Combined financial peformance: CEZ Below-Average Financial Performance

COMBINED PERFORMANCE	November 28, 2024
VALUE
VALUE	31
GROWTH
GROWTH	37
SAFETY
SAFETY	94
COMBINED
COMBINED	48

ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), CEZ (Electric Utilities, Czech Republic) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of CEZ are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives) and show below-average growth (Growth Rank of 37) but are safely financed (Safety Rank of 86), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on CEZ's financial characteristics. As the company CEZ's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 31) and low growth (Obermatt Growth Rank of 37), 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 86) 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. ...read more

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