Fact based stock research
DS Smith (LSE:SMDS)

GB0008220112

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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.

(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.

DS Smith stock research in summary

dssmith.com

ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), DS Smith (Paper Packaging, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of DS Smith are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives), and are riskily financed (Safety Rank of 6, which means above-average debt burdens) but show above-average growth (Growth Rank of 73). ...read more

RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on DS Smith's financial characteristics. As the company DS Smith shows low value with an Obermatt Value Rank of 3 (97% 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 73% of comparable companies (Obermatt Growth Rank is 73). 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 6 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 DS Smith, even a low-value company (in terms of its key financial indicators) can be a good investment. 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	3
Growth Rank	73
Safety Rank	6
Combined Rank	6

Country	United Kingdom
Industry	Paper Packaging
Index	FTSE All Shares, FTSE 100, FTSE 350, Low Emissions, Dividends Europe, Human Rights, Renewables Users
Size class	X-Large

This stock has achievements: Gold Winner CEO.

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

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

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

Research History: DS Smith

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	45	59	81	3
GROWTH
GROWTH	44	17	59	73
SAFETY
SAFETY	6	3	12	6
SENTIMENT
SENTIMENT	n/a	49	82	^new
360° VIEW
360° VIEW	n/a	3	67	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Apr-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better DS Smith is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	45	59	81	3
GROWTH
GROWTH	44	17	59	73
SAFETY
SAFETY	6	3	12	6
COMBINED
COMBINED	1	1	52	6

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of DS Smith the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), DS Smith 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 DS Smith. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 58% 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 20 which means that the stock price compared with what market professionals expect for future profits is higher than 80% of comparable companies, indicating a low value concerning DS Smith's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 11 which means that the stock price compared with what market professionals expect for future profit levels is higher than 89% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 13 is also low. Compared with invested capital, the stock price is higher than for 87% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 3, is a sell recommendation based on DS Smith's stock price compared with the company's operational size and dividend yields. Should dividend investors pick DS Smith? 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 DS Smith only if they reasonably expect the low current profit levels to be transitory. 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 essential 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)	64	55	54	20
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	27	57	81	11
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	56	52	54	13
DIVIDEND YIELD
DIVIDEND YIELD	78	89	96	58
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	45	59	81	3

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of DS Smith; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), DS Smith 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 DS Smith. Capital Growth has a rank of 64, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 99 (above 99% of alternative investments). But Sales Growth has only a rank of 45, which means that, currently, professionals expect the company to grow less than 55% of its competitors, and Profit Growth is also low at a rank of 27. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for DS Smith, investors may want to look at value and sentiment indicators for a well-rounded picture of this 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 mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	55	54	45	45
PROFIT GROWTH
PROFIT GROWTH	37	54	61	27
CAPITAL GROWTH
CAPITAL GROWTH	n/a	29	48	64
STOCK RETURNS
STOCK RETURNS	68	29	59	99
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	44	17	59	73

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of DS Smith.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company DS Smith 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 DS Smith 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 DS Smith. Liquidity is at 36, meaning that the company generates less profit to service its debt than 64% 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 31, meaning the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. Finally, Refinancing is at a rank of 8 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 92% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 6 (worse than 94% compared with alternatives), DS Smith 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. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of DS Smith because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	42	38	45	31
REFINANCING
REFINANCING	2	1	4	8
LIQUIDITY
LIQUIDITY	44	35	43	36
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	6	3	12	6

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of DS Smith 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	49	56	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	61	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	94	^new
MARKET PULSE
MARKET PULSE	n/a	58	56	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	49	82	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for DS Smith.
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