January 23, 2025
Top 10 Stock Galp Energia Hold 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: Galp Energia – Top 10 Stock in PSI-20 Index
Galp Energia is listed as a top 10 stock on January 23, 2025 in the market index PSI 20 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the 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 25 (25% performer), Obermatt assesses an overall hold recommendation for Galp Energia on January 23, 2025.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Oil & Gas Integrated |
| Index | Low Emissions, Human Rights, PSI General, PSI 20 |
| 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 Galp Energia Hold
| 360 METRICS | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 11 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| SENTIMENT | ||||||||
| SENTIMENT | 67 |
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| 360° VIEW | ||||||||
| 360° VIEW | 25 |
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ANALYSIS: With an Obermatt 360° View of 25 (better than 25% compared with alternatives), overall professional sentiment and financial characteristics for the stock Galp Energia are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Galp Energia. The consolidated Sentiment Rank has a good rank of 67, which means that professional investors are more optimistic about the stock than for 67% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 56 or better than 56% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 11, meaning that the share price of Galp Energia is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 35. ...read more
RECOMMENDATION: With a consolidated 360° View of 25, Galp Energia is worse than 75% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 67) and safe financing practices (Safety Rank of 56), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Galp Energiạ is bright. 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
Sentiment Strategy: Professional Market Sentiment for Galp Energia positive
ANALYSIS: With an Obermatt Sentiment Rank of 67 (better than 67% compared with alternatives), overall professional sentiment and engagement for the stock Galp Energia is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Galp Energia. Analyst Opinions are at a rank of 35 (worse than 65% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 92, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Galp Energia. Even better, the Professional Investors rank is 62, meaning that professional investors hold more stock in this company than in 62% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 50, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 50% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 67 (more positive than 67% compared with investment alternatives), Galp Energia has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Galp Energia Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Galp Energia shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Galp Energia. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than 54% of comparable companies, indicating a good value concerning to Galp Energia's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 33, meaning that dividends are expected to be lower than for 67% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 95% of alternatives (only 5% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 93% 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 11, is a sell recommendation based on Galp Energia's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Galp Energia could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Galp Energia looks like an expensive investment today. ...read more
Growth Strategy: Galp Energia Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Galp Energia 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 Galp Energia. Profit Growth has a rank of 58, which means that currently professionals expect the company to grow its profits more than 58% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 63 (above 63% of alternative investments). But Sales Growth has a below the median rank of 14, which means that, currently, professionals expect the company to grow less than 86% of its competitors, and Capital Growth also has a lower rank of 44. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, 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 Galp Energia. ...read more
Safety Strategy: Galp Energia Debt Financing Safety above-average
| SAFETY METRICS | January 23, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 25 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 82 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 56 |
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ANALYSIS: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), the company Galp Energia 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 Galp Energia 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 Galp Energia. Refinancing is at 55, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Liquidity is also good at 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 25, which means the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 56 (better than 56% compared with alternatives), Galp Energia 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 Galp Energia 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: Galp Energia Lowest Financial Performance
| COMBINED PERFORMANCE | January 23, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 11 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Galp Energia (Oil & Gas Integrated, Portugal) shares have lower financial characteristics compared with similar stocks. Shares of Galp Energia are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 56), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Galp Energia's financial characteristics. As the company Galp Energia's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 11) and low growth (Obermatt Growth Rank of 35), 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 56) 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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