June 13, 2024
Top 10 Stock Jeronimo Martins Sell 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: Jeronimo Martins – Top 10 Stock in PSI-20 Index
Jeronimo Martins is listed as a top 10 stock on June 13, 2024 in the market index PSI 20 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 21 (21% performer), Obermatt issues an overall sell recommendation for Jeronimo Martins on June 13, 2024.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Food Retail |
| Index | 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 Jeronimo Martins Sell
| 360 METRICS | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 22 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 21 |
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ANALYSIS: With an Obermatt 360° View of 21 (better than 21% compared with alternatives), overall professional sentiment and financial characteristics for the stock Jeronimo Martins are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Jeronimo Martins. The consolidated Sentiment Rank has a good rank of 59, which means that professional investors are more optimistic about the stock than for 59% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 22, which means that the share price of Jeronimo Martins is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 31, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 31% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 25 which means that the company has a riskier financing structure than 75% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 21, Jeronimo Martins is worse than 79% of all alternative stock investment opportunities based on the Obermatt Method. This means that Jeronimo Martins shares are on the riskier side for investors. As only the professional market sentiment (Sentiment Rank of 59) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Jeronimo Martinṣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Jeronimo Martins positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock Jeronimo Martins is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Jeronimo Martins. Analyst Opinions are at a rank of 46 (worse than 54% 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 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Jeronimo Martins. Even better, the Professional Investors rank is 54, meaning that professional investors hold more stock in this company than in 54% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 58, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 58% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), Jeronimo Martins 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: Jeronimo Martins Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 22 (worse than 78% compared with alternatives), Jeronimo Martins shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Jeronimo Martins. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 79% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 41 which means that the stock price compared with what market professionals expect for future profits is higher than 59% of comparable companies, indicating a low value concerning Jeronimo Martins's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 20 which means that the stock price compared with what market professionals expect for future profit levels is higher than 80% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 8 is also low. Compared with invested capital, the stock price is higher than for 92% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 22, is a sell recommendation based on Jeronimo Martins's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Jeronimo Martins? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Jeronimo Martins only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Jeronimo Martins Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Jeronimo Martins 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 Jeronimo Martins. While Sales Growth ranks at 58, professionals currently expect the company to grow more than 58% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 31, which means that, currently, professionals expect the company to grow its profits less than 69% of its competitors, and Capital Growth has a low rank of 49. Historic stock returns were also below average with a current Stock Returns rank of 28 which means that the stock returns have recently been below 72% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Jeronimo Martins Debt Financing Safety below-average
| SAFETY METRICS | June 13, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 21 |
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| REFINANCING | ||||||||
| REFINANCING | 18 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 25 |
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ANALYSIS: With an Obermatt Safety Rank of 25 (better than 25% compared with alternatives), the company Jeronimo Martins 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 Jeronimo Martins 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 Jeronimo Martins. Liquidity is at 71, meaning the company generates more profit to service its debt than 71% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 18, 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 82% of its competitors. Leverage is also high at a rank of 21, which means that the company has an above-average debt-to-equity ratio. It has more debt than 79% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 25 (worse than 75% compared with alternatives), Jeronimo Martins 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. ...read more
Combined financial peformance: Jeronimo Martins Lowest Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 22 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| COMBINED | ||||||||
| COMBINED | 4 |
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ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Jeronimo Martins (Food Retail, Portugal) shares have lower financial characteristics compared with similar stocks. Shares of Jeronimo Martins are low in value (priced high) with a consolidated Value Rank of 22 (worse than 78% of alternatives), show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 25), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Jeronimo Martins's financial characteristics. As the company Jeronimo Martins's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 22), low growth (Obermatt Growth Rank of 31), and risky financing practices (Obermatt Safety Rank of 25), 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. ...read more
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