August 24, 2023
Top 10 Stock Essity Aktiebolag Hold 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: Essity Aktiebolag – Top 10 Stock in Optionsmäklarna Stockholm Stock Exchange Stockholm Index OMX 30
Essity Aktiebolag is listed as a top 10 stock on August 24, 2023 in the market index OMX 30 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for Essity Aktiebolag on August 24, 2023.
Snapshot: Obermatt Ranks
| Country | Sweden |
| Industry | Household Products |
| Index | Human Rights, OMX 30 |
| Size class | XX-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 Essity Aktiebolag Hold
| 360 METRICS | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 15 |
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| SENTIMENT | ||||||||
| SENTIMENT | 34 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock Essity Aktiebolag are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Essity Aktiebolag. The consolidated Value Rank has an attractive rank of 59, which means that the share price of Essity Aktiebolag is on the lower side compared with the 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 consolidated Growth Rank has a good rank of 65, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 34. Professional investors are more confident in 66% other stocks. Worryingly, the company has risky financing, with a Safety rank of 15. This means 85% of comparable companies have a safer financing structure than Essity Aktiebolag. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, Essity Aktiebolag is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 59 and the Growth Rank above-average at 65, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 34. In addition, the company financing structure is on the riskier side (Safety Rank of 15). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Essity Aktiebolag only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 34 (better than 34% compared with alternatives), overall professional sentiment and engagement for the stock Essity Aktiebolag is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Essity Aktiebolag. Analyst Opinions are at a rank of 40 (worse than 60% 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 27, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 33, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 67% of competitors). On the upside, the Professional Investors rank is 59, which means that professional investors hold more stock in this company than in 59% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 34 (less encouraging than 66% compared with investment alternatives), Essity Aktiebolag has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Essity Aktiebolag stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Essity Aktiebolag Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), Essity Aktiebolag shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Essity Aktiebolag. Price-to-Sales (P/S) is 64, which means that the stock price compared with what market professionals expect for future sales is lower than for 64% of comparable companies, indicating a good value concerning Essity Aktiebolag's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 67% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 68 (dividends are expected to be higher than 68% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 61% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Essity Aktiebolag to 39. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 59, is a buy recommendation based on Essity Aktiebolag's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Essity Aktiebolag Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Essity Aktiebolag 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 all but one indicator above average for Essity Aktiebolag. Profit Growth has a rank of 80 which means that currently professionals expect the company to grow its profits more than 80% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 66, and Stock Returns has a rank of 69 which means that the stock returns have recently been above 69% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 4 (96% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Essity Aktiebolag Debt Financing Safety risky
| SAFETY METRICS | August 24, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 15 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 44 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 15 |
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ANALYSIS: With an Obermatt Safety Rank of 15 (better than 15% compared with alternatives), the company Essity Aktiebolag 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 Essity Aktiebolag 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 Essity Aktiebolag. Liquidity is at 44, meaning that the company generates less profit to service its debt than 56% 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 20, meaning the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. Finally, Refinancing is at a rank of 15 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 15 (worse than 85% compared with alternatives), Essity Aktiebolag 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.
Combined financial peformance: Essity Aktiebolag Below-Average Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 59 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| COMBINED | ||||||||
| COMBINED | 40 |
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ANALYSIS: With an Obermatt Combined Rank of 40 (worse than 60% compared with investment alternatives), Essity Aktiebolag (Household Products, Sweden) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Essity Aktiebolag are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 15), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 40, is a hold recommendation based on Essity Aktiebolag's financial characteristics. As the company Essity Aktiebolag's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 59) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 15) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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