March 7, 2024
Top 10 Stock Philips 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: Philips – Top 10 Stock in SDG 3: Good Health and Well-being
Philips is listed as a top 10 stock on March 07, 2024 in the market index SDG 3 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 52 (high 52% performer), Obermatt assesses an overall buy recommendation for Philips on March 07, 2024.
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 Buy
| 360 METRICS | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 28 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| SENTIMENT | ||||||||
| SENTIMENT | 27 |
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| 360° VIEW | ||||||||
| 360° VIEW | 52 |
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ANALYSIS: With an Obermatt 360° View of 52 (better than 52% compared with alternatives), overall professional sentiment and financial characteristics for the stock Philips are above 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 99, 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 99% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 28, 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 46, meaning the company has a riskier financing structure than 54% 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 73% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 27. ...read more
RECOMMENDATION: With a consolidated 360° View of 52, Philips is better positioned than 52% 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 99. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 28), a riskier financing structure than the competition (Safety Rank of 46), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 27) 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 only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 27 (better than 27% compared with alternatives), overall professional sentiment and engagement for the stock Philips is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other 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. Worse, Analyst Opinions Change has a rank of 39, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 34, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 66% of competitors). On the upside, the Professional Investors rank is 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 27 (less encouraging than 73% compared with investment alternatives), Philips has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Philips stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Philips Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 99 (better than 99% compared with alternatives) for 2024, 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 91 which means that the stock price compared with what market professionals expect for future sales is lower than for 91% 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 86% 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 86. 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 99, 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 28 (better than 28% 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, with half of the indicators below and half above average for Philips. Profit Growth has a rank of 62, which means that currently professionals expect the company to grow its profits more than 62% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors, and Capital Growth also has a lower rank of 13. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 28, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Philips. ...read more
Safety Strategy: Philips Debt Financing Safety below-average
| SAFETY METRICS | March 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 42 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 56 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 46 |
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ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% 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 just one indicator above average for Philips. Liquidity is at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 42, 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 58% of its competitors. Leverage is also high at a rank of 38, which means that the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), Philips has a financing structure that is 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: Philips Above-Average Financial Performance
| COMBINED PERFORMANCE | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 28 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| COMBINED | ||||||||
| COMBINED | 68 |
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ANALYSIS: With an Obermatt Combined Rank of 68 (better than 68% 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 99 (better than 99% of alternatives) but show below-average growth (Growth Rank of 28), and are riskily financed (Safety Rank of 46), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 68, 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 99) but low growth (Obermatt Growth Rank of 28) and risky financing practices (Obermatt Safety Rank of 46), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 99% 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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