September 5, 2024
Top 10 Stock Danske Bank Strong Buy 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: Danske Bank – Top 10 Stock in SDG 16: Peace Justice and Strong Institutions
Danske Bank is listed as a top 10 stock on September 05, 2024 in the market index SDG 16 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 75 (top 75% performer), Obermatt assesses an overall strong buy recommendation for Danske Bank on September 05, 2024.
Snapshot: Obermatt Ranks
| Country | Denmark |
| Industry | Diversified Banks |
| Index | OMX C20, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Renewables Users, SDG 13, SDG 16, SDG 4, SDG 5, SDG 8 |
| Size class | X-Large |
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 Danske Bank Strong Buy
| 360 METRICS | September 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| SENTIMENT | ||||||||
| SENTIMENT | 94 |
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| 360° VIEW | ||||||||
| 360° VIEW | 75 |
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ANALYSIS: With an Obermatt 360° View of 75 (better than 75% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Danske Bank are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Danske Bank. The consolidated Growth Rank has a good rank of 55, 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. This means that growth is higher than for 55% of competitors in the same industry. The consolidated Safety Rank at 67 means that the company has a financing structure that is safer than 67% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 19, meaning that the share price of Danske Bank is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 81% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 75, Danske Bank is better positioned than 75% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 55), a safe financing structure (Safety Rank of 67), and positive professional market sentiment (Sentiment Rank of 94), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Danske Bank compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (55% better than peers). The value rank could be the reverse reflection of that (45%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Danske Bank very positive
ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Danske Bank is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Danske Bank. Analyst Opinions are at a rank of 58 (better than 58% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 53, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Danske Bank. The Professional Investors rank is 99, which means that currently, professional investors hold more stock in this company than in 99% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 91 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Danske Bank has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Danske Bank stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Danske Bank Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Danske Bank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Danske Bank. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 85% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Danske Bank's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 20 which means that the stock price compared with what market professionals expect for future profit levels is higher than 80% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 25 is also low. Compared with invested capital, the stock price is higher than for 75% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on Danske Bank's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Danske Bank? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Danske Bank only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Danske Bank Growth Momentum good
| GROWTH METRICS | September 5, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 43 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 62 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 39 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 67 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 55 |
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ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Danske Bank 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 Danske Bank. Profit Growth has a rank of 62, which means that currently professionals expect the company to grow its profits more than 62% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 67 (above 67% of alternative investments). But Sales Growth has a below the median rank of 43, which means that, currently, professionals expect the company to grow less than 57% of its competitors, and Capital Growth also has a lower rank of 39. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, 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 Danske Bank. ...read more
Safety Strategy: Danske Bank Debt Financing Safety above-average
| SAFETY METRICS | September 5, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 8 |
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| REFINANCING | ||||||||
| REFINANCING | 76 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 67 |
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ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company Danske Bank 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 Danske Bank 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, with two out of three indicators above-average for Danske Bank. Refinancing is at 76, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 76% of its competitors. Liquidity is also good at 90, meaning the company generates more profit to service its debt than 90% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 8, which means the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), Danske Bank has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Danske Bank could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Danske Bank Below-Average Financial Performance
| COMBINED PERFORMANCE | September 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 41 |
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ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Danske Bank (Diversified Banks, Denmark) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Danske Bank are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives). But they show above-average growth (Growth Rank of 55) and are safely financed (Safety Rank of 67, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on Danske Bank's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Danske Bank exhibits low value (Obermatt Value Rank of 19), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 55). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 67) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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