Fact based stock research
Inchcape (LSE:INCH)

GB00B61TVQ02

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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.

Inchcape stock research in summary

inchcape.com

ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), Inchcape (Distributors, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Inchcape are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives) but show below-average growth (Growth Rank of 28), and are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 18, is a sell recommendation based on Inchcape's financial characteristics. As the company Inchcape's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 28) and risky financing practices (Obermatt Safety Rank of 32), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 58% 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	58
Growth Rank	28
Safety Rank	32
Combined Rank	18

Country	United Kingdom
Industry	Distributors
Index	FTSE All Shares, FTSE 250, FTSE 350, Employee Focus EU
Size class	X-Large

This stock has achievements: Top 10 Stock.

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

Further information

Multiple opinions. One number.

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

Research History: Inchcape

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	57	90	58
GROWTH
GROWTH	77	85	65	28
SAFETY
SAFETY	72	74	63	32
SENTIMENT
SENTIMENT	n/a	87	94	^new
360° VIEW
360° VIEW	n/a	95	100	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Inchcape is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	9	57	90	58
GROWTH
GROWTH	77	85	65	28
SAFETY
SAFETY	72	74	63	32
COMBINED
COMBINED	37	86	98	18

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Inchcape the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), Inchcape shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Inchcape. Price-to-Profit (also referred to as price-earnings, P/E) is 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning Inchcape's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 43, which means that the stock price is lower as regards to invested capital than for 43% of comparable investments. On the other hand, Price-to-Sales is less favorable than 54% of alternatives (only 46% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 26% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 58, is a buy recommendation based on Inchcape's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. 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 especially important 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)	63	70	66	46
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	22	46	88	73
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	33	42	46	43
DIVIDEND YIELD
DIVIDEND YIELD	34	70	89	74
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	9	57	90	58

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Inchcape; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 28 (better than 28% compared with alternatives), Inchcape 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 three out of four indicators below average for Inchcape. Sales Growth has a below market rank of 22, which means that, currently, professionals expect the company to grow less than 78% of its competitors. The same is valid for Capital Growth, with a rank of 34, and Profit Growth, with a rank of 28. Currently, professionals expect the company to grow its profits less than 72% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 64, which means that the stock returns have recently been above 64% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 28, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Inchcape, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. 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 low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	44	23	37	22
PROFIT GROWTH
PROFIT GROWTH	47	82	76	28
CAPITAL GROWTH
CAPITAL GROWTH	n/a	98	86	34
STOCK RETURNS
STOCK RETURNS	80	69	38	64
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	77	85	65	28

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Inchcape.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company Inchcape 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 Inchcape 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 Inchcape. Liquidity is at 53, meaning the company generates more profit to service its debt than 53% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 46, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 54% of its competitors. Leverage is also high at a rank of 29, which means that the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), Inchcape has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	61	75	29	29
REFINANCING
REFINANCING	81	59	54	46
LIQUIDITY
LIQUIDITY	17	47	85	53
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	72	74	63	32

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Inchcape 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	87	90	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	95	64	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	10	77	^new
MARKET PULSE
MARKET PULSE	n/a	72	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	87	94	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Inchcape.
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