September 12, 2024
Top 10 Stock Reckitt Benckiser 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: Reckitt Benckiser – Top 10 Stock in FTSE 100 Index
Reckitt Benckiser 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. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 1 (1% performer), Obermatt issues an overall sell recommendation for Reckitt Benckiser on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Household Products |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Renewables Users, Water Tech |
| 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 Reckitt Benckiser Sell
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 22 |
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| 360° VIEW | ||||||||
| 360° VIEW | 1 |
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ANALYSIS: With an Obermatt 360° View of 1 (better than 1% compared with alternatives), overall professional sentiment and financial characteristics for the stock Reckitt Benckiser are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Reckitt Benckiser. Only the consolidated Value Rank has an attractive rank of 58, which means that the share price of Reckitt Benckiser is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 58% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 20, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 14, meaning the company has a riskier financing structure than 86% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 78% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 22. ...read more
RECOMMENDATION: With a consolidated 360° View of 1, Reckitt Benckiser is worse than 99% of all alternative stock investment opportunities based on the Obermatt Method. This means that Reckitt Benckiser shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 58. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 20), a riskier financing structure than the competition (Safety Rank of 14), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 22) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Reckitt Benckiser is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Reckitt Benckiser. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Reckitt Benckiser negative
ANALYSIS: With an Obermatt Sentiment Rank of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock Reckitt Benckiser is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Reckitt Benckiser. Analyst Opinions are at a rank of 30 (worse than 70% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 36, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 39, which means that professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Reckitt Benckiser is Market Pulse, with a rank of 60, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 60% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 22 (less encouraging than 78% compared with investment alternatives), Reckitt Benckiser has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Reckitt Benckiser Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), Reckitt Benckiser 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 Reckitt Benckiser. Price-to-Profit (also referred to as price-earnings, P/E) is 54 which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning Reckitt Benckiser'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 26, which means that the stock price is lower as regards to invested capital than for 26% of comparable investments. On the other hand, Price-to-Sales is less favorable than 62% of alternatives (only 38% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 8% 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 Reckitt Benckiser'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: Reckitt Benckiser Growth Momentum negative
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 16 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 30 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 58 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 31 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 20 |
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ANALYSIS: With an Obermatt Growth Rank of 20 (better than 20% compared with alternatives), Reckitt Benckiser 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 Reckitt Benckiser. Only Capital Growth has a good rank of 58, which means that currently professionals expect the company to grow its invested capital more than 30% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 16 which means that currently professionals expect the company to grow less than 84% of its competitors. Profit Growth with a rank of 30 and Stock Returns with a rank of 31 are also low (below 69% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 20, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Reckitt Benckiser is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Reckitt Benckiser Debt Financing Safety risky
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 6 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 59 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company Reckitt Benckiser has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Reckitt Benckiser 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 Reckitt Benckiser. Liquidity is at 59, meaning the company generates more profit to service its debt than 59% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 6, 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 94% of its competitors. Leverage is also high at a rank of 15, which means that the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), Reckitt Benckiser has a financing structure that is significantly 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: Reckitt Benckiser Lowest Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| COMBINED | ||||||||
| COMBINED | 1 |
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ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Reckitt Benckiser (Household Products, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Reckitt Benckiser 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 20), and are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Reckitt Benckiser's financial characteristics. As the company Reckitt Benckiser's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 20) and risky financing practices (Obermatt Safety Rank of 14), 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. ...read more
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