Fact based stock research
Incitec Pivot (ASX:IPL)

AU000000IPL1

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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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Incitec Pivot stock research in summary

incitecpivot.com.au

ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), Incitec Pivot (Diversified Chemicals, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Incitec Pivot are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives), show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 35), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on Incitec Pivot's financial characteristics. As the company Incitec Pivot's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 39), low growth (Obermatt Growth Rank of 21), and risky financing practices (Obermatt Safety 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. 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	39
Growth Rank	21
Safety Rank	35
Combined Rank	19

Country	Australia
Industry	Diversified Chemicals
Index	ASX 100, ASX 200, ASX 300, Water Efficiency
Size class	X-Large

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

Further information

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

Research History: Incitec Pivot

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	53	63	61	39
GROWTH
GROWTH	36	73	1	21
SAFETY
SAFETY	3	10	46	35
SENTIMENT
SENTIMENT	n/a	24	26	^new
360° VIEW
360° VIEW	n/a	33	14	^new

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

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	53	63	61	39
GROWTH
GROWTH	36	73	1	21
SAFETY
SAFETY	3	10	46	35
COMBINED
COMBINED	16	41	22	19

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Incitec Pivot shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Incitec Pivot. Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Incitec Pivot's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 32, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Incitec Pivot. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 37 and Dividend Yield, which is lower than 52% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Incitec Pivot's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Incitec Pivot? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Incitec Pivot? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Incitec Pivot may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. 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	37	41	34
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	38	48	59	37
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	90	53	59	32
DIVIDEND YIELD
DIVIDEND YIELD	1	98	85	48
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	53	63	61	39

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Incitec Pivot shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Incitec Pivot. Sales Growth has a below market rank of 8, which means that, currently, professionals expect the company to grow less than 92% of its competitors. The same is valid for Capital Growth, with a rank of 32, and Profit Growth, with a rank of 25. Currently, professionals expect the company to grow its profits less than 75% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 89, which means that the stock returns have recently been above 89% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Incitec Pivot, 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	24	4	1	8
PROFIT GROWTH
PROFIT GROWTH	38	70	29	25
CAPITAL GROWTH
CAPITAL GROWTH	n/a	57	26	32
STOCK RETURNS
STOCK RETURNS	48	85	5	89
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	36	73	1	21

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 35 (better than 35% compared with alternatives), the company Incitec Pivot 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 Incitec Pivot 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 Incitec Pivot and the other two below average. Leverage is at a rank of 56 meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 35, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 65% of its competitors. Liquidity is at a rank of 25, meaning that the company generates less profit to service its debt than 75% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 35 (worse than 65% compared with alternatives), Incitec Pivot has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Incitec Pivot are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Incitec Pivot and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	32	46	56	56
REFINANCING
REFINANCING	10	3	65	35
LIQUIDITY
LIQUIDITY	40	14	18	25
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	3	10	46	35

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Incitec Pivot 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	70	31	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	15	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	13	54	^new
MARKET PULSE
MARKET PULSE	n/a	25	53	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	24	26	^new

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