October 31, 2024
Top 10 Stock UniCredit Strong 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: UniCredit – Top 10 Stock in Milano Italia Borsa Index MIB
UniCredit 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. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 75 (top 75% performer), Obermatt assesses an overall strong buy recommendation for UniCredit on October 31, 2024.
Snapshot: Obermatt Ranks
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 UniCredit Strong Buy
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 69 |
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| SENTIMENT | ||||||||
| SENTIMENT | 73 |
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| 360° VIEW | ||||||||
| 360° VIEW | 75 |
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ANALYSIS: With an Obermatt 360° View of 75 (better than 75% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock UniCredit are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for UniCredit. The consolidated Value Rank has an attractive rank of 59, which means that the share price of UniCredit is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 59% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 69. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 73. But the consolidated Growth Rank has a low rank of 23, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 77 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 75, UniCredit is better positioned than 75% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 59), secure financing practices (Safety Rank of 69), and positive market sentiment in the professional investor community (Sentiment Rank of 73). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 23), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of UniCredit is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for UniCredit positive
ANALYSIS: With an Obermatt Sentiment Rank of 73 (better than 73% compared with alternatives), overall professional sentiment and engagement for the stock UniCredit is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for UniCredit. Analyst Opinions are at a rank of 70 (better than 70% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 100 which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. But Analyst Opinions Change has a rank of 43, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in UniCredit. Furthermore, Market Pulse has a rank of 38, 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 62% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 73 (more positive than 73% compared with investment alternatives), UniCredit has a reputation among professional investors that is above-average compared with that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: UniCredit Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), UniCredit 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 UniCredit. Price-to-Profit (also referred to as price-earnings, P/E) is 72 which means that the stock price compared with what market professionals expect for future profits is lower than for 72% of comparable companies, indicating a good value concerning UniCredit'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 42, which means that the stock price is lower as regards to invested capital than for 42% of comparable investments. On the other hand, Price-to-Sales is less favorable than 52% of alternatives (only 48% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 44% 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 59, is a buy recommendation based on UniCredit'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. ...read more
Growth Strategy: UniCredit Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), UniCredit 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 UniCredit. Sales Growth has a below market rank of 18, which means that, currently, professionals expect the company to grow less than 82% of its competitors. The same is valid for Capital Growth, with a rank of 11, and Profit Growth, with a rank of 32. Currently, professionals expect the company to grow its profits less than 68% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 95, which means that the stock returns have recently been above 95% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for UniCredit, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: UniCredit Debt Financing Safety above-average
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 22 |
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| REFINANCING | ||||||||
| REFINANCING | 84 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 66 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 69 |
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ANALYSIS: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), the company UniCredit 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 UniCredit 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 UniCredit. Refinancing is at 84, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 84% of its competitors. Liquidity is also good at 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 22, which means the company has an above-average debt-to-equity ratio. It has more debt than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 69 (better than 69% compared with alternatives), UniCredit 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 UniCredit 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. ...read more
Combined financial peformance: UniCredit Above-Average Financial Performance
| COMBINED PERFORMANCE | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| COMBINED | ||||||||
| COMBINED | 57 |
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ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), UniCredit (Diversified Banks, Italy) shares have above-average financial characteristics compared with similar stocks. Shares of UniCredit are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives), are safely financed (Safety Rank of 69, which means low debt burdens), but show below-average growth (Growth Rank of 23). ...read more
RECOMMENDATION: A Combined Rank of 57, is a buy recommendation based on UniCredit's financial characteristics. As the company UniCredit's key financial metrics exhibit good value (Obermatt Value Rank of 59) but low growth (Obermatt Growth Rank of 23) while being safely financed (Obermatt Safety Rank of 69), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 59% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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