December 26, 2024
Top 10 Stock Royal Mail 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: Royal Mail – Top 10 Stock in SDG 10: Reduced Inequality
Royal Mail is listed as a top 10 stock on December 26, 2024 in the market index SDG 10 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for Royal Mail on December 26, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Air Freight & Logistics |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Employee Focus EU, Human Rights, SDG 10, SDG 11, SDG 13, SDG 3, SDG 8 |
| 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 Royal Mail Buy
| 360 METRICS | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| SENTIMENT | ||||||||
| SENTIMENT | 8 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock Royal Mail are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Royal Mail. The consolidated Value Rank has an attractive rank of 53, which means that the share price of Royal Mail 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 53% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 95, 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 51. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 8. Professional investors are more confident in 92% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 54, Royal Mail is better positioned than 54% 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 53), above-average growth (Growth Rank of 95), and safe financing practices (Safety Rank of 51), 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 professional market sentiment is on the riskier side (Sentiment Rank of 8), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Royal Mail is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Royal Mail negative
ANALYSIS: With an Obermatt Sentiment Rank of 8 (better than 8% compared with alternatives), overall professional sentiment and engagement for the stock Royal Mail is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Royal Mail. Analyst Opinions are at a rank of 25 (worse than 75% 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 6 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 49, 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 51% of competitors). No wonder, the Professional Investors rank is only 23, which means that professional investors hold less stock in this company than in 77% of alternative investment opportunities. Pros tend to stay away from Royal Mail, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 8 (less encouraging than 92% compared with investment alternatives), Royal Mail has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Royal Mail Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), Royal Mail shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Royal Mail. Price-to-Sales (P/S) is 84, which means that the stock price compared with what market professionals expect for future sales is lower than for 84% of comparable companies, indicating a good value concerning Royal Mail's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 60% of alternatives (40% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 35 are lower than average (dividends are expected to be lower than 65% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 35, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on Royal Mail's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Royal Mail may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Royal Mail Growth Momentum high
| GROWTH METRICS | December 26, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 27 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 98 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 78 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 87 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 95 |
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ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2024, Royal Mail shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Royal Mail. Profit Growth has a rank of 98 which means that currently professionals expect the company to grow its profits more than 98% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 78, and Stock Returns has a rank of 87 which means that the stock returns have recently been above 87% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 27 (73% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, 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: Royal Mail Debt Financing Safety above-average
| SAFETY METRICS | December 26, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 66 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
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ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Royal Mail 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 Royal Mail 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 where two out of three are above average for Royal Mail.Leverage is at 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors.Refinancing is at a rank of 63, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Liquidity is at 8, meaning that the company generates less profit to service its debt than 92% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), Royal Mail has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Royal Mail Top Financial Performance
| COMBINED PERFORMANCE | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| COMBINED | ||||||||
| COMBINED | 89 |
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ANALYSIS: With an Obermatt Combined Rank of 89 (better than 89% compared with investment alternatives), Royal Mail (Air Freight & Logistics, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Royal Mail are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives), show above-average growth (Growth Rank of 95), and are safely financed (Safety Rank of 51), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 89, is a strong buy recommendation based on Royal Mail's financial characteristics. As the company Royal Mail's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 53), above-average growth (Obermatt Growth Rank of 95), and indicate that the company is safely financed (Obermatt Safety Rank of 51), 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 Royal Mail. 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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