August 17, 2023
Top 10 Stock Lojas Renner 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: Lojas Renner – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
Lojas Renner is listed as a top 10 stock on August 17, 2023 in the market index BOVESPA 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 72 (high 72% performer), Obermatt assesses an overall buy recommendation for Lojas Renner on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Apparel Retail |
| Index | BOVESPA, Independent Boards Growth Markets, Renewables Users |
| 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 Lojas Renner Buy
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| SENTIMENT | ||||||||
| SENTIMENT | 53 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% compared with alternatives), overall professional sentiment and financial characteristics for the stock Lojas Renner are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Lojas Renner. The consolidated Value Rank has an attractive rank of 69, which means that the share price of Lojas Renner 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 69% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 88. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 53. But the consolidated Growth Rank has a low rank of 25, 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. 75 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, Lojas Renner is better positioned than 72% 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 69), secure financing practices (Safety Rank of 88), and positive market sentiment in the professional investor community (Sentiment Rank of 53). 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 25), 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 Lojas Renner 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 Lojas Renner positive
ANALYSIS: With an Obermatt Sentiment Rank of 53 (better than 53% compared with alternatives), overall professional sentiment and engagement for the stock Lojas Renner is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Lojas Renner. Analyst Opinions are at a rank of 34 (worse than 66% 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 55, 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 Lojas Renner. More encouragingly, the Professional Investors rank is 95, which means that professional investors hold more stock in this company than in 95% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 6, 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 94% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 53 (more positive than 53% compared with investment alternatives), Lojas Renner has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Lojas Renner. 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: Lojas Renner Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Lojas Renner 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 Lojas Renner. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 71 which means that the stock price compared with what market professionals expect for future profits is lower than for 71% of comparable companies, indicating a good value concerning Lojas Renner's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 74, and for Dividend Yield with a Dividend Yield Rank of 70. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 67% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 33). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a buy recommendation based on Lojas Renner's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Lojas Renner has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Lojas Renner shares. ...read more
Growth Strategy: Lojas Renner Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), Lojas Renner shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lojas Renner. Sales Growth has a rank of 67 which means that currently, professionals expect the company to grow more than 67% of its competitors. Capital Growth is also above 18% of competitors with a rank of 62. But Profit Growth only has a rank of 18, which means that currently professionals expect the company to grow its profits less than 82% of its competitors. And Stock Returns have also been below average with a rank of only 13. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 25, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Lojas Renner Debt Financing Safety very solid
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 76 |
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| REFINANCING | ||||||||
| REFINANCING | 84 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 88 |
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ANALYSIS: With an Obermatt Safety Rank of 88 (better than 88% compared with alternatives) for 2023, the company Lojas Renner has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Lojas Renner 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, where all three are above average for Lojas Renner. Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Refinancing is at a rank of 84, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 84% of its competitors. Finally, Liquidity is also good at a rank of 60, which means that the company generates more profit to service its debt than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 88 (better than 88% compared with alternatives), Lojas Renner has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Lojas Renner Above-Average Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| COMBINED | ||||||||
| COMBINED | 74 |
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ANALYSIS: With an Obermatt Combined Rank of 74 (better than 74% compared with investment alternatives), Lojas Renner (Apparel Retail, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Lojas Renner are a good value (attractively priced) with a consolidated Value Rank of 69 (better than 69% of alternatives), are safely financed (Safety Rank of 88, which means low debt burdens), but show below-average growth (Growth Rank of 25). ...read more
RECOMMENDATION: A Combined Rank of 74, is a buy recommendation based on Lojas Renner's financial characteristics. As the company Lojas Renner's key financial metrics exhibit good value (Obermatt Value Rank of 69) but low growth (Obermatt Growth Rank of 25) while being safely financed (Obermatt Safety Rank of 88), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 69% 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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