March 28, 2024
Top 10 Stock Suzano 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: Suzano – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
Suzano is listed as a top 10 stock on March 28, 2024 in the market index BOVESPA because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 67 (high 67% performer), Obermatt assesses an overall buy recommendation for Suzano on March 28, 2024.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Paper Products |
| Index | BOVESPA, Low Emissions, Energy Efficient, Human Rights |
| Size class | X-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 Suzano Buy
| 360 METRICS | March 28, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 48 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 52 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 28 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 90 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 67 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 67 (better than 67% compared with alternatives), overall professional sentiment and financial characteristics for the stock Suzano are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Suzano. The consolidated Growth Rank has a good rank of 52, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 52% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 90, which means that professional investors are more optimistic about the stock than for 90% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 48, which means that the share price of Suzano is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 52% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 28, which means that the company has a financing structure that is riskier than those of 72% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 67, Suzano is better positioned than 67% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 52), and professional market sentiment is positive (Sentiment Rank of 90), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Suzano very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Suzano is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Suzano. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 77, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Suzano. The Professional Investors rank is 78, which means that currently, professional investors hold more stock in this company than in 78% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 59 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 59% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Suzano has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Suzano stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Suzano Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Suzano shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Suzano. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 67 which means that the stock price compared with what market professionals expect for future profits is lower than for 67% of comparable companies, indicating a good value concerning Suzano's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 61, and for Dividend Yield with a Dividend Yield Rank of 51. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 58% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 42). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Suzano's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Suzano has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Suzano shares. ...read more
Growth Strategy: Suzano Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 52 (better than 52% compared with alternatives), Suzano 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 Suzano. Sales Growth has a rank of 66 which means that currently professionals expect the company to grow more than 66% of its competitors. Stock Returns are also above average with a rank of 87. But Capital Growth has only a rank of 17, which means that currently professionals expect the company to grow its invested capital less than 83% of its competitors. Profit Growth is also low, with a rank of only 7, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 52, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 87% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Suzano Debt Financing Safety below-average
| SAFETY METRICS | March 28, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 7 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 72 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 19 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 28 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Suzano 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 Suzano 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 Suzano and the other two below average. Refinancing is at 72, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 72% of its competitors. But Leverage is high with a rank of 7, meaning the company has an above-average debt-to-equity ratio. It has more debt than 93% of its competitors. Liquidity is also on the riskier side with a rank of 19, meaning the company generates less profit to service its debt than 81% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Suzano has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Suzano are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Suzano Below-Average Financial Performance
| COMBINED PERFORMANCE | March 28, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 48 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 52 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 19 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 27 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 27 (worse than 73% compared with investment alternatives), Suzano (Paper Products, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Suzano are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), and are riskily financed (Safety Rank of 28, which means above-average debt burdens) but show above-average growth (Growth Rank of 52). ...read more
RECOMMENDATION: A Combined Rank of 27, is a hold recommendation based on Suzano's financial characteristics. As the company Suzano shows low value with an Obermatt Value Rank of 48 (52% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 52% of comparable companies (Obermatt Growth Rank is 52). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 28 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Suzano, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.