Fact based stock research
East African Breweries (NASE:EABL)

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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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East African Breweries stock research in summary

eabl.com

ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), East African Breweries (Brewers, Kenya) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of East African Breweries are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives) but show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 7), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 25, is a hold recommendation based on East African Breweries's financial characteristics. As the company East African Breweries's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 39) and risky financing practices (Obermatt Safety Rank of 7), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 73% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. 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	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	Kenya
Industry	Brewers
Index
Size class	Large

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Research History: East African Breweries

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	38	59	82	n/a
GROWTH
GROWTH	90	77	41	n/a
SAFETY
SAFETY	1	1	3	n/a
SENTIMENT
SENTIMENT	n/a	45	26	^new
360° VIEW
360° VIEW	n/a	27	18	^new

Most recent update of the stock research: . Financial reporting date used for calculating ranks: . Stock research history is based on the Obermatt Method. The higher the rank, the better East African Breweries is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	38	59	82	n/a
GROWTH
GROWTH	90	77	41	n/a
SAFETY
SAFETY	1	1	3	n/a
COMBINED
COMBINED	10	41	24	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of East African Breweries the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), East African Breweries shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for East African Breweries. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 75 which means that the stock price compared with what market professionals expect for future profits is lower than for 75% of comparable companies, indicating a good value concerning East African Breweries's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 62, and for Dividend Yield with a Dividend Yield Rank of 87. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 54% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 46). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on East African Breweries's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that East African Breweries has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing East African Breweries shares. 9. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	79	31	53	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	68	69	81	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	40	65	n/a
DIVIDEND YIELD
DIVIDEND YIELD	1	87	88	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	38	59	82	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of East African Breweries; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), East African Breweries 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 East African Breweries. Sales Growth has a rank of 72 which means that currently, professionals expect the company to grow more than 72% of its competitors. Capital Growth is also above 39% of competitors with a rank of 61. But Profit Growth only has a rank of 39, which means that currently professionals expect the company to grow its profits less than 61% of its competitors. And Stock Returns have also been below average with a rank of only 7. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. 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	90	57	72	n/a
PROFIT GROWTH
PROFIT GROWTH	n/a	100	39	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	28	67	n/a
STOCK RETURNS
STOCK RETURNS	58	61	7	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	90	77	41	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of East African Breweries.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 7 (better than 7% compared with alternatives), the company East African Breweries 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 East African Breweries 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 East African Breweries. Liquidity is at 30, meaning that the company generates less profit to service its debt than 70% 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 8, meaning the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. Finally, Refinancing is at a rank of 17 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 7 (worse than 93% compared with alternatives), East African Breweries 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 East African Breweries because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	18	4	6	n/a
REFINANCING
REFINANCING	20	1	5	n/a
LIQUIDITY
LIQUIDITY	43	22	29	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	1	1	3	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of East African Breweries 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	52	44	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	23	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	89	47	^new
MARKET PULSE
MARKET PULSE	n/a	27	7	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	45	26	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for East African Breweries.
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