September 12, 2024
Top 10 Stock JD Sports Strong Buy 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: JD Sports – Top 10 Stock in FTSE 100 Index
JD Sports is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for JD Sports on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Specialty Stores |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Renewables Users |
| Size class | X-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 JD Sports Strong Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 74 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| SENTIMENT | ||||||||
| SENTIMENT | 83 |
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| 360° VIEW | ||||||||
| 360° VIEW | 84 |
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ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock JD Sports are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for JD Sports. The consolidated Value Rank has an attractive rank of 51, which means that the share price of JD Sports is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 51% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 74, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 64. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 83. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, JD Sports is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 51), above-average growth (Growth Rank of 74), safe financing practices (Safety Rank of 64), and a positive market sentiment in the professional investor community (Sentiment Rank of 83), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of JD Sports is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for JD Sports very positive
ANALYSIS: With an Obermatt Sentiment Rank of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock JD Sports is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for JD Sports. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 75, which means that currently, professional investors hold more stock in this company than in 75% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 80 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 80% of competitors). But Analyst Opinions Change has a below-average rank of 34, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in JD Sports. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 83 (more positive than 83% compared with investment alternatives), JD Sports has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: JD Sports Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), JD Sports 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 JD Sports. Price-to-Profit (also referred to as price-earnings, P/E) is 70 which means that the stock price compared with what market professionals expect for future profits is lower than for 70% of comparable companies, indicating a good value concerning JD Sports'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 30, which means that the stock price is lower as regards to invested capital than for 30% of comparable investments. On the other hand, Price-to-Sales is less favorable than 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 45% 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 51, is a buy recommendation based on JD Sports'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. ...read more
Growth Strategy: JD Sports Growth Momentum good
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 87 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 41 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 68 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 53 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 74 |
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ANALYSIS: With an Obermatt Growth Rank of 74 (better than 74% compared with alternatives), JD Sports 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 all but one indicator above average for JD Sports. Sales Growth has a rank of 87 which means that currently, professionals expect the company to grow more than 87% of its competitors. Capital Growth is also above 41% of competitors with a rank of 68, and Stock Returns with the rank of 53 is also an outperformance. Only Profit Growth is low with a rank of 41 which means that currently, professionals expect the company to grow its profits less than 59% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 74, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, JD Sports is a good growth stock. ...read more
Safety Strategy: JD Sports Debt Financing Safety above-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 53 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
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ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company JD Sports 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 JD Sports 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 JD Sports. Refinancing is at 53, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. Liquidity is also good at 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 34, which means the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), JD Sports 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 JD Sports 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: JD Sports Top Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 74 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), JD Sports (Specialty Stores, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of JD Sports are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), show above-average growth (Growth Rank of 74), and are safely financed (Safety Rank of 64), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on JD Sports's financial characteristics. As the company JD Sports's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 51), above-average growth (Obermatt Growth Rank of 74), and indicate that the company is safely financed (Obermatt Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of JD Sports. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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