October 31, 2024
Top 10 Stock Terna 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: Terna – Top 10 Stock in Milano Italia Borsa Index MIB
Terna is listed as a top 10 stock on October 31, 2024 in the market index MIB because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 58 (high 58% performer), Obermatt assesses an overall buy recommendation for Terna on October 31, 2024.
Snapshot: Obermatt Ranks
| Country | Italy |
| Industry | Electric Utilities |
| Index | MIB, Low Emissions, Employee Focus EU, Diversity Europe, Human Rights, Recycling |
| Size class | 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 Terna Buy
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 58 |
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ANALYSIS: With an Obermatt 360° View of 58 (better than 58% compared with alternatives), overall professional sentiment and financial characteristics for the stock Terna are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Terna. The consolidated Growth Rank has a good rank of 85, 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 85% of competitors in the same industry. The consolidated Safety Rank at 50 means that the company has a financing structure that is safer than 50% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 59, which means that professional investors are more optimistic about the stock than for 59% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 17, meaning that the share price of Terna is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 83% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 58, Terna is better positioned than 58% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 85), a safe financing structure (Safety Rank of 50), and positive professional market sentiment (Sentiment Rank of 59), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of Terna compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (85% better than peers). The value rank could be the reverse reflection of that (15%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the 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 Terna positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock Terna is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Terna. Analyst Opinions are at a rank of 23 (worse than 77% 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 62, 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 Terna. More encouragingly, the Professional Investors rank is 99, which means that professional investors hold more stock in this company than in 99% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 36, 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 64% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), Terna has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Terna. 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: Terna Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Terna shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Terna. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 56% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 13 which means that the stock price compared with what market professionals expect for future profits is higher than 87% of comparable companies, indicating a low value concerning Terna's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 36 which means that the stock price compared with what market professionals expect for future profit levels is higher than 64% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 17 is also low. Compared with invested capital, the stock price is higher than for 83% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Terna's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Terna? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Terna only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Terna Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2024, Terna shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Terna. Sales Growth has a value of 52, which means that, currently, professionals expect the company to grow more than 52% of its competitors. The same is valid for Profit Growth with a value of 75 and for Capital Growth with 92. In addition, Stock Returns had an above-average rank value of 59, which means they have been higher than 59% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Terna exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Terna Debt Financing Safety above-average
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 27 |
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| REFINANCING | ||||||||
| REFINANCING | 41 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 50 |
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ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), the company Terna 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 Terna 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 just one indicator above average for Terna. Liquidity is at 76, meaning the company generates more profit to service its debt than 76% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 41, 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 59% of its competitors. Leverage is also high at a rank of 27, which means that the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 50 (better than 50% compared with alternatives), Terna has a financing structure that is safer 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: Terna Below-Average Financial Performance
| COMBINED PERFORMANCE | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Terna (Electric Utilities, Italy) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Terna are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives). But they show above-average growth (Growth Rank of 85) and are safely financed (Safety Rank of 50, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Terna's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Terna exhibits low value (Obermatt Value Rank of 17), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 85). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 50) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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