Fact based stock research
Royal Mail (LSE:IDS)

GB00BDVZYZ77

How to read the free 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.

Royal Mail stock research in summary

royalmailgroup.com

ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% 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 51 (better than 51% of alternatives), show above-average growth (Growth Rank of 97) but are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Royal Mail's financial characteristics. As the company Royal Mail's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 51) and above-average growth (Obermatt Growth Rank of 97), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 45) 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. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	51
Growth Rank	97
Safety Rank	45
Combined Rank	81

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

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Royal Mail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	86	95	52	51
GROWTH
GROWTH	83	37	88	97
SAFETY
SAFETY	68	93	47	45
SENTIMENT
SENTIMENT	n/a	23	20	^new
360° VIEW
360° VIEW	n/a	75	53	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Royal Mail is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	86	95	52	51
GROWTH
GROWTH	83	37	88	97
SAFETY
SAFETY	68	93	47	45
COMBINED
COMBINED	94	92	80	81

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Royal Mail the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% 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 61% of alternatives (39% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 28 are lower than average (dividends are expected to be lower than 72% 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 37, 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 51, 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). We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	94	85	87	84
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	96	72	9	37
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	82	82	79	61
DIVIDEND YIELD
DIVIDEND YIELD	64	76	50	28
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	86	95	52	51

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Royal Mail; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% 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 60, and Stock Returns has a rank of 85 which means that the stock returns have recently been above 85% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 48 (52% of its competitors are better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, 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. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	48	32	64	48
PROFIT GROWTH
PROFIT GROWTH	13	21	82	98
CAPITAL GROWTH
CAPITAL GROWTH	n/a	60	58	60
STOCK RETURNS
STOCK RETURNS	96	65	76	85
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	83	37	88	97

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Royal Mail.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Royal Mail 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 Royal Mail 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 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 55, 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 55% 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 45 (worse than 55% compared with alternatives), Royal Mail has a financing structure that is riskier 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. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Royal Mail more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	70	92	80	66
REFINANCING
REFINANCING	10	75	57	55
LIQUIDITY
LIQUIDITY	83	88	4	8
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	68	93	47	45

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Royal Mail and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	64	16	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	26	10	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	55	66	^new
MARKET PULSE
MARKET PULSE	n/a	30	49	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	23	20	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Royal Mail.
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