June 29, 2023
Top 10 Stock Philips Hold 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: Philips – Top 10 Stock in SDG 17: Partnerships to achieve the Goal
Philips is listed as a top 10 stock on June 29, 2023 in the market index SDG 17 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 36 (36% performer), Obermatt assesses an overall hold recommendation for Philips on June 29, 2023.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Health Care Equipment |
| Index | AEX, EURO STOXX 50, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Renewables Users, Recycling, SDG 12, SDG 13, SDG 17, SDG 3 |
| 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 Philips Hold
| 360 METRICS | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| SENTIMENT | ||||||||
| SENTIMENT | 21 |
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| 360° VIEW | ||||||||
| 360° VIEW | 36 |
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ANALYSIS: With an Obermatt 360° View of 36 (better than 36% compared with alternatives), overall professional sentiment and financial characteristics for the stock Philips are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Philips. Only the consolidated Value Rank has an attractive rank of 97, which means that the share price of Philips 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 97% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 45, 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 27, meaning the company has a riskier financing structure than 73% 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 79% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 21. ...read more
RECOMMENDATION: With a consolidated 360° View of 36, Philips is worse than 64% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 97. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 45), a riskier financing structure than the competition (Safety Rank of 27), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 21) 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 Philips 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 Philips. 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 Philips negative
ANALYSIS: With an Obermatt Sentiment Rank of 21 (better than 21% compared with alternatives), overall professional sentiment and engagement for the stock Philips 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 Philips. Analyst Opinions are at a rank of 1 (worse than 99% 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 56, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Philips. More encouragingly, the Professional Investors rank is 57, which means that professional investors hold more stock in this company than in 57% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 26, 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 74% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 21 (less encouraging than 79% compared with investment alternatives), Philips has a reputation among professional investors that is far below that of its competitors. The sentiment signals are mixed for Philips. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Philips Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2023, Philips shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Philips. Price-to-Sales is 89 which means that the stock price compared with what market professionals expect for future sales is lower than for 89% of comparable companies, indicating a good value for Philips's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 79% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 89. Compared with other companies in the same industry, dividend yields of Philips are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a buy recommendation based on Philips's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Philips based on its detailed value metrics.
Growth Strategy: Philips Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Philips 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, where half of the indicators are below and half above average for Philips. Profit Growth, with a rank of 80 (better than 80% of its competitors), and Capital Growth, with a rank of 61, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors, and Stock Returns are at a rank of 43. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Philips Debt Financing Safety below-average
| SAFETY METRICS | June 29, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 40 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 37 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 27 |
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ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company Philips 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 Philips 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 all three metrics below average for Philips. Liquidity is at 37, meaning that the company generates less profit to service its debt than 63% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 40, meaning the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. Finally, Refinancing is at a rank of 47 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 27 (worse than 73% compared with alternatives), Philips has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Philips Above-Average Financial Performance
| COMBINED PERFORMANCE | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| COMBINED | ||||||||
| COMBINED | 60 |
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ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Philips (Health Care Equipment, Netherlands) shares have above-average financial characteristics compared with similar stocks. Shares of Philips are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives) but show below-average growth (Growth Rank of 45), and are riskily financed (Safety Rank of 27), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Philips's financial characteristics. As the company Philips's key financial metrics exhibit good value (Obermatt Value Rank of 97) but low growth (Obermatt Growth Rank of 45) and risky financing practices (Obermatt Safety Rank of 27), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 97% 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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