October 10, 2024
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 EURO STOXX 50 Index
Philips is listed as a top 10 stock on October 10, 2024 in the market index EURO STOXX 50 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 45 (45% performer), Obermatt assesses an overall hold recommendation for Philips on October 10, 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 Hold
| 360 METRICS | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 38 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| SENTIMENT | ||||||||
| SENTIMENT | 24 |
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| 360° VIEW | ||||||||
| 360° VIEW | 45 |
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ANALYSIS: With an Obermatt 360° View of 45 (better than 45% 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 88, 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 88% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 38, 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 41, meaning the company has a riskier financing structure than 59% 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 76% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 24. ...read more
RECOMMENDATION: With a consolidated 360° View of 45, Philips is worse than 55% 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 88. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 38), a riskier financing structure than the competition (Safety Rank of 41), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 24) 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 24 (better than 24% 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 three out of four metrics below average for Philips. Analyst Opinions are at a rank of 13 (worse than 87% 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 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Philips. But the Professional Investors rank is low at 42, which means that professional investors hold less stock in this company than in 58% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 47, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 24 (less encouraging than 76% compared with investment alternatives), Philips has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Philips Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% 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 67 which means that the stock price compared with what market professionals expect for future sales is lower than for 67% 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 62% 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 72. Compared with other companies in the same industry, dividend yields of Philips are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, 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 38 (better than 38% 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 84 (above 84% 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 34. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 38, 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 | October 10, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 47 |
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| REFINANCING | ||||||||
| REFINANCING | 22 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 41 |
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ANALYSIS: With an Obermatt Safety Rank of 41 (better than 41% 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 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 22, 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 78% of its competitors. Leverage is also high at a rank of 47, which means that the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 41 (worse than 59% 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 | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 38 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 63 |
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ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% 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 88 (better than 88% of alternatives) but show below-average growth (Growth Rank of 38), and are riskily financed (Safety Rank of 41), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 63, 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 88) but low growth (Obermatt Growth Rank of 38) and risky financing practices (Obermatt Safety Rank of 41), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 88% 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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