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Engie Brasil Energia (BOVESPA:EGIE3)

BREGIEACNOR9

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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).

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Engie Brasil Energia stock research in summary

engie.com.br

ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), Engie Brasil Energia (Renewable Electricity, Brazil) shares have lower financial characteristics compared with similar stocks. Shares of Engie Brasil Energia are a good value (attractively priced) with a consolidated Value Rank of 55 (better than 55% of alternatives) but show below-average growth (Growth Rank of 20), and are riskily financed (Safety Rank of 18), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on Engie Brasil Energia's financial characteristics. As the company Engie Brasil Energia's key financial metrics exhibit good value (Obermatt Value Rank of 55) but low growth (Obermatt Growth Rank of 20) and risky financing practices (Obermatt Safety Rank of 18), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 55% 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. 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	55
Growth Rank	20
Safety Rank	18
Combined Rank	6

Country	Brazil
Industry	Renewable Electricity
Index	BOVESPA, Low Emissions, Good Governace Growth Markets, Human Rights, Independent Boards Growth Markets, Solar Tech
Size class	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

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Research History: Engie Brasil Energia

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	58	49	55
GROWTH
GROWTH	53	27	87	20
SAFETY
SAFETY	54	29	23	18
SENTIMENT
SENTIMENT	n/a	45	51	^new
360° VIEW
360° VIEW	n/a	20	53	^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 Engie Brasil Energia is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	58	49	55
GROWTH
GROWTH	53	27	87	20
SAFETY
SAFETY	54	29	23	18
COMBINED
COMBINED	44	20	59	6

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

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 55 (better than 55% compared with alternatives), Engie Brasil Energia shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Engie Brasil Energia. Price-to-Profit (also referred to as price-earnings, P/E) is 82 which means that the stock price compared with what market professionals expect for future profits is lower than for 82% of comparable companies, indicating a good value concerning Engie Brasil Energia's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 22, which means that the stock price is lower as regards to invested capital than for 22% of comparable investments. On the other hand, Price-to-Sales is less favorable than 79% of alternatives (only 21% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 17% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 55, is a buy recommendation based on Engie Brasil Energia's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	38	38	29	21
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	50	74	74	82
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8	19	6	22
DIVIDEND YIELD
DIVIDEND YIELD	71	94	85	83
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33	58	49	55

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

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 20 (better than 20% compared with alternatives), Engie Brasil Energia shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Engie Brasil Energia. Only Capital Growth has a good rank of 74, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 13 which means that currently professionals expect the company to grow less than 87% of its competitors. Profit Growth with a rank of 27 and Stock Returns with a rank of 30 are also low (below 70% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 20, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Engie Brasil Energia is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. 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 limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	51	8	30	13
PROFIT GROWTH
PROFIT GROWTH	56	16	57	27
CAPITAL GROWTH
CAPITAL GROWTH	n/a	90	95	74
STOCK RETURNS
STOCK RETURNS	25	37	53	30
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	53	27	87	20

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

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% compared with alternatives), the company Engie Brasil Energia has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Engie Brasil Energia 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 Engie Brasil Energia. Liquidity is at 62, meaning the company generates more profit to service its debt than 62% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 26, 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 74% of its competitors. Leverage is also high at a rank of 9, which means that the company has an above-average debt-to-equity ratio. It has more debt than 91% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), Engie Brasil Energia has a financing structure that is significantly 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. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	55	8	12	9
REFINANCING
REFINANCING	47	49	33	26
LIQUIDITY
LIQUIDITY	59	61	53	62
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	54	29	23	18

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Engie Brasil Energia 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	27	12	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	79	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	39	73	^new
MARKET PULSE
MARKET PULSE	n/a	58	67	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	45	51	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Engie Brasil Energia.
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