November 23, 2023
Top 10 Stock easyjet Hold Recommendation

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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 easyjet Hold

360 METRICS	November 23, 2023
VALUE
VALUE	46
GROWTH
GROWTH	100
SAFETY
SAFETY	23
SENTIMENT
SENTIMENT	18
360° VIEW
360° VIEW	47

ANALYSIS: With an Obermatt 360° View of 47 (better than 47% compared with alternatives), overall professional sentiment and financial characteristics for the stock easyjet are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for easyjet. The consolidated Growth Rank has a good rank of 100, 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. It ranks higher than 100% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 46 means that the share price of easyjet is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 54% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 23, which means that the company has a riskier financing structure than 77% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 18, indicating professional investors are more pessimistic about the stock than for 82% of alternative investment opportunities. ...read more

RECOMMENDATION: With a consolidated 360° View of 47, easyjet is worse than 53% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 100), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 18), the company is rather risky when it comes to financing (Safety Rank of 23). The negative market view on easyjet may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of easyjet compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth 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 (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more

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Sentiment Strategy: Professional Market Sentiment for easyjet negative

SENTIMENT METRICS	November 23, 2023
ANALYST OPINION
ANALYST OPINION	25
OPINIONS CHANGE
OPINIONS CHANGE	49
PRO HOLDINGS
PRO HOLDINGS	32
MARKET PULSE
MARKET PULSE	25
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	18

ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock easyjet is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for easyjet. Analyst Opinions are at a rank of 25 (worse than 75% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 49 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 25, 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 75% of competitors). No wonder, the Professional Investors rank is only 32, which means that professional investors hold less stock in this company than in 68% of alternative investment opportunities. Pros tend to stay away from easyjet, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), easyjet has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more

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Value Strategy: easyjet Stock Price Value below-average critical

VALUE METRICS	November 23, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	69
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	51
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	54
DIVIDEND YIELD
DIVIDEND YIELD	30
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	46

ANALYSIS: With an Obermatt Value Rank of 46 (worse than 54% compared with alternatives), easyjet 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 easyjet. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than for 69% of comparable companies, indicating a good value regarding easyjet's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 51% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 54. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 30% of all competitors have even lower dividend yields than easyjet (a Dividend Yield Rank of 30). 70% alternative investments in the same business provide a higher dividend yield. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 46, is a hold recommendation based on easyjet's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more

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Growth Strategy: easyjet Growth Momentum high

GROWTH METRICS	November 23, 2023
REVENUE GROWTH
REVENUE GROWTH	91
PROFIT GROWTH
PROFIT GROWTH	96
CAPITAL GROWTH
CAPITAL GROWTH	92
STOCK RETURNS
STOCK RETURNS	55
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	100

ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2023, easyjet 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 easyjet. Sales Growth has a value of 91, which means that, currently, professionals expect the company to grow more than 91% of its competitors. The same is valid for Profit Growth with a value of 96 and for Capital Growth with 92. In addition, Stock Returns had an above-average rank value of 55, which means they have been higher than 55% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, easyjet 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

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Safety Strategy: easyjet Debt Financing Safety risky

SAFETY METRICS	November 23, 2023
LEVERAGE
LEVERAGE	40
REFINANCING
REFINANCING	37
LIQUIDITY
LIQUIDITY	14
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	23

ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company easyjet 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 easyjet 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 all three metrics below average for easyjet. Liquidity is at 14, meaning that the company generates less profit to service its debt than 86% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 40, meaning the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. Finally, Refinancing is at a rank of 37 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), easyjet has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.

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Combined financial peformance: easyjet Above-Average Financial Performance

COMBINED PERFORMANCE	November 23, 2023
VALUE
VALUE	46
GROWTH
GROWTH	100
SAFETY
SAFETY	14
COMBINED
COMBINED	64

ANALYSIS: With an Obermatt Combined Rank of 64 (better than 64% compared with investment alternatives), easyjet (Airlines, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of easyjet are low in value (priced high) with a consolidated Value Rank of 46 (worse than 54% of alternatives), and are riskily financed (Safety Rank of 23, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more

RECOMMENDATION: A Combined Rank of 64, is a buy recommendation based on easyjet's financial characteristics. As the company easyjet shows low value with an Obermatt Value Rank of 46 (54% 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 100% of comparable companies (Obermatt Growth Rank is 100). 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 23 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 easyjet, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more

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