October 24, 2024
Top 10 Stock Mitchells & Butlers 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: Mitchells & Butlers – Top 10 Stock in Customer Satisfaction Leaders in Europe
Mitchells & Butlers is listed as a top 10 stock on October 24, 2024 in the market index Customer Focus EU because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 75 (top 75% performer), Obermatt assesses an overall strong buy recommendation for Mitchells & Butlers on October 24, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Restaurants |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Customer Focus EU, Sound Pay Europe |
| Size class | 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 Mitchells & Butlers Strong Buy
| 360 METRICS | October 24, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 62 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 70 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 33 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 80 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 75 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 75 (better than 75% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Mitchells & Butlers are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Mitchells & Butlers. The consolidated Value Rank has an attractive rank of 62, which means that the share price of Mitchells & Butlers 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 62% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 70, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 80. But the company’s financing is risky with a Safety rank of 33. This means 67% of comparable companies have a safer financing structure than Mitchells & Butlers. ...read more
RECOMMENDATION: With a consolidated 360° View of 75, Mitchells & Butlers is better positioned than 75% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 62), above-average growth (Growth Rank of 70), and positive market sentiment in the professional investor community (Sentiment Rank of 80), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 33), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Mitchells & Butlers is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Mitchells & Butlers very positive
ANALYSIS: With an Obermatt Sentiment Rank of 80 (better than 80% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Mitchells & Butlers is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Mitchells & Butlers. Analyst Opinions are at a rank of 76 (better than 76% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 89 which means that currently, stock research experts are getting even more optimistic about investments in Mitchells & Butlers. But Market Pulse has a low rank of 42, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 58% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 47, which means that, currently, professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 80 (more positive than 80% compared with investment alternatives), Mitchells & Butlers has a reputation among professional investors that is significantly higher than that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Mitchells & Butlers Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 62 (better than 62% compared with alternatives), Mitchells & Butlers shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Mitchells & Butlers. Price-to-Sales (P/S) is 70, which means that the stock price compared with what market professionals expect for future sales is lower than for 70% of comparable companies, indicating a good value regarding Mitchells & Butlers's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 82% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 86. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Mitchells & Butlers (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 62, is a buy recommendation based on Mitchells & Butlers's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Mitchells & Butlers Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 70 (better than 70% compared with alternatives), Mitchells & Butlers 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 Mitchells & Butlers. Profit Growth has a rank of 81 which means that currently professionals expect the company to grow its profits more than 81% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 62, and Stock Returns has a rank of 62 which means that the stock returns have recently been above 62% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 37 (63% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 70, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Mitchells & Butlers Debt Financing Safety below-average
| SAFETY METRICS | October 24, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 55 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 32 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 31 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 33 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% compared with alternatives), the company Mitchells & Butlers 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 Mitchells & Butlers 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 Mitchells & Butlers and the other two below average. Leverage is at a rank of 55 meaning the company has a below-average debt-to-equity ratio. It has less debt than 55% of its competitors.Refinancing is at a rank of 32, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 68% of its competitors. Liquidity is at a rank of 31, meaning that the company generates less profit to service its debt than 69% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 33 (worse than 67% compared with alternatives), Mitchells & Butlers 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 Mitchells & Butlers are on the safer side. ...read more
Combined financial peformance: Mitchells & Butlers Above-Average Financial Performance
| COMBINED PERFORMANCE | October 24, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 62 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 70 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 31 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 63 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% compared with investment alternatives), Mitchells & Butlers (Restaurants, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Mitchells & Butlers are a good value (attractively priced) with a consolidated Value Rank of 62 (better than 62% of alternatives), show above-average growth (Growth Rank of 70) but are riskily financed (Safety Rank of 33), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 63, is a buy recommendation based on Mitchells & Butlers's financial characteristics. As the company Mitchells & Butlers's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 62) and above-average growth (Obermatt Growth Rank of 70), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 33) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.