Fact based stock research
Sappi (JSE:SAP)

ZAE000006284

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.

Sappi stock research in summary

sappi.com

ANALYSIS: With an Obermatt Combined Rank of 93 (better than 93% compared with investment alternatives), Sappi (Paper Products, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Sappi are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), show above-average growth (Growth Rank of 59), and are safely financed (Safety Rank of 55), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 93, is a strong buy recommendation based on Sappi's financial characteristics. As the company Sappi's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 96), above-average growth (Obermatt Growth Rank of 59), and indicate that the company is safely financed (Obermatt Safety Rank of 55), 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 Sappi. 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	96
Growth Rank	59
Safety Rank	55
Combined Rank	93

Country	South Africa
Industry	Paper Products
Index	Energy Efficient, Good Governace Growth Markets, Human Rights, Independent Boards Growth Markets, Timber Industry, JSE All Shares
Size class	X-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: Sappi

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	47	93	98	96
GROWTH
GROWTH	39	69	23	59
SAFETY
SAFETY	14	35	55	55
SENTIMENT
SENTIMENT	n/a	72	20	^new
360° VIEW
360° VIEW	n/a	93	49	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Sappi is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	47	93	98	96
GROWTH
GROWTH	39	69	23	59
SAFETY
SAFETY	14	35	55	55
COMBINED
COMBINED	17	83	70	93

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2024, Sappi shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sappi. Price-to-Sales is 87 which means that the stock price compared with what market professionals expect for future sales is lower than for 87% of comparable companies, indicating a good value for Sappi's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 93% 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 Sappi are expected to be higher than for 85% of all competitors (a Dividend Yield rank of 85). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Sappi'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 Sappi based on its detailed value metrics. 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)	95	97	97	87
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	5	89	97	93
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	86	89	95	89
DIVIDEND YIELD
DIVIDEND YIELD	1	78	85	85
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	47	93	98	96

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Sappi shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sappi. Profit Growth has a rank of 65, which means that currently professionals expect the company to grow its profits more than 65% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has a below the median rank of 40, which means that, currently, professionals expect the company to grow less than 60% of its competitors, and Capital Growth also has a lower rank of 15. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy 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 Sappi. 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, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	26	17	37	40
PROFIT GROWTH
PROFIT GROWTH	29	84	28	65
CAPITAL GROWTH
CAPITAL GROWTH	n/a	100	54	15
STOCK RETURNS
STOCK RETURNS	57	33	23	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	39	69	23	59

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Sappi 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 Sappi 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, with two out of three indicators above-average for Sappi. Refinancing is at 83, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 83% of its competitors. Liquidity is also good at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 28, which means the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Sappi has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Sappi could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Sappi and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	10	12	28	28
REFINANCING
REFINANCING	65	100	89	83
LIQUIDITY
LIQUIDITY	8	14	41	55
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	14	35	55	55

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Sappi 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	51	53	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	79	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	78	32	^new
MARKET PULSE
MARKET PULSE	n/a	14	7	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	72	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 Sappi.
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