May 23, 2024
Top 10 Stock Deutsche Telekom 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: Deutsche Telekom – Top 10 Stock in Germany TECDAX
Deutsche Telekom is listed as a top 10 stock on May 23, 2024 in the market index TecDAX because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 70 (high 70% performer), Obermatt assesses an overall buy recommendation for Deutsche Telekom on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Integrated Telecommunication |
| Index | CDAX, DAX 40, EURO STOXX 50, Employee Focus EU, Renewables Users, Telecommunications, TecDAX |
| Size class | XX-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 Deutsche Telekom Buy
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| SENTIMENT | ||||||||
| SENTIMENT | 90 |
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| 360° VIEW | ||||||||
| 360° VIEW | 70 |
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ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock Deutsche Telekom are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Deutsche Telekom. The consolidated Growth Rank has a good rank of 59, 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 59% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 90, which means that professional investors are more optimistic about the stock than for 90% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 48, which means that the share price of Deutsche Telekom is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 52% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 38, which means that the company has a financing structure that is riskier than those of 62% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 70, Deutsche Telekom is better positioned than 70% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 59), and professional market sentiment is positive (Sentiment Rank of 90), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. 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 do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects 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 Deutsche Telekom very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Deutsche Telekom is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Deutsche Telekom. Analyst Opinions are at a rank of 89 (better than 89% 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 56, 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 Deutsche Telekom. The Professional Investors rank is 55, which means that currently, professional investors hold more stock in this company than in 55% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 80 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 80% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Deutsche Telekom 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 Deutsche Telekom 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: Deutsche Telekom Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Deutsche Telekom 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 are above average for Deutsche Telekom. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value concerning Deutsche Telekom's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 59% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 32 (dividends are expected to be higher than for 32% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 58% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Deutsche Telekom to 42. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Deutsche Telekom's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Deutsche Telekom Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Deutsche Telekom 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 Deutsche Telekom. Sales Growth has a rank of 53, which means that, currently, professionals expect the company to grow more than 53% of its competitors. Profit Growth with a rank of 63 is also above average. But Capital Growth has only a rank of 49, and Stock Returns with 47 are also below-average. Stock returns for Deutsche Telekom have recently been below 53% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Deutsche Telekom. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Deutsche Telekom Debt Financing Safety below-average
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 35 |
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| REFINANCING | ||||||||
| REFINANCING | 58 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 25 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 38 |
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ANALYSIS: With an Obermatt Safety Rank of 38 (better than 38% compared with alternatives), the company Deutsche Telekom has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Deutsche Telekom 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 just one indicator above average for Deutsche Telekom and the other two below average. Refinancing is at 58, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. But Leverage is high with a rank of 35, meaning the company has an above-average debt-to-equity ratio. It has more debt than 65% of its competitors. Liquidity is also on the riskier side with a rank of 25, meaning the company generates less profit to service its debt than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 38 (worse than 62% compared with alternatives), Deutsche Telekom has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Deutsche Telekom are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Deutsche Telekom Below-Average Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), Deutsche Telekom (Integrated Telecommunication, Germany) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Deutsche Telekom are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), and are riskily financed (Safety Rank of 38, which means above-average debt burdens) but show above-average growth (Growth Rank of 59). ...read more
RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on Deutsche Telekom's financial characteristics. As the company Deutsche Telekom shows low value with an Obermatt Value Rank of 48 (52% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 59% of comparable companies (Obermatt Growth Rank is 59). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 38 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Deutsche Telekom, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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