December 14, 2023
Top 10 Stock PPL Strong Buy 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 PPL Strong Buy

360 METRICS	December 14, 2023
VALUE
VALUE	49
GROWTH
GROWTH	89
SAFETY
SAFETY	90
SENTIMENT
SENTIMENT	97
360° VIEW
360° VIEW	100

ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock PPL are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for PPL. The consolidated Growth Rank has a good rank of 89, 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. This means that growth is higher than for 89% of competitors in the same industry. The consolidated Safety Rank at 90 means that the company has a financing structure that is safer than 90% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 97, which means that professional investors are more optimistic about the stock than for 97% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 49, meaning that the share price of PPL is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 51% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 100, PPL is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 89), a safe financing structure (Safety Rank of 90), and positive professional market sentiment (Sentiment Rank of 97), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of PPL compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (89% better than peers). The value rank could be the reverse reflection of that (11%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for PPL very positive

SENTIMENT METRICS	December 14, 2023
ANALYST OPINION
ANALYST OPINION	80
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	91
MARKET PULSE
MARKET PULSE	66
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	97

ANALYSIS: With an Obermatt Sentiment Rank of 97 (better than 97% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock PPL is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for PPL. Analyst Opinions are at a rank of 80 (better than 80% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in PPL. The Professional Investors rank is 91, which means that currently, professional investors hold more stock in this company than in 91% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 66 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 66% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 97 (more positive than 97% compared with investment alternatives), PPL has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean PPL stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more

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Value Strategy: PPL Stock Price Value below-average critical

VALUE METRICS	December 14, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	36
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	54
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	72
DIVIDEND YIELD
DIVIDEND YIELD	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	49

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), PPL shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for PPL. Price-to-Profit (also referred to as price-earnings, P/E) is 54 which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning PPL'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 72, which means that the stock price is lower as regards to invested capital than for 72% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 64% of alternatives (only 36% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 57% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on PPL'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 concerning expected revenues, 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 Group or 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 distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more

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Growth Strategy: PPL Growth Momentum high

GROWTH METRICS	December 14, 2023
REVENUE GROWTH
REVENUE GROWTH	71
PROFIT GROWTH
PROFIT GROWTH	81
CAPITAL GROWTH
CAPITAL GROWTH	71
STOCK RETURNS
STOCK RETURNS	55
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	89

ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2023, PPL 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 PPL. Sales Growth has a value of 71, which means that, currently, professionals expect the company to grow more than 71% of its competitors. The same is valid for Profit Growth with a value of 81 and for Capital Growth with 71. 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 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, PPL 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: PPL Debt Financing Safety very solid

SAFETY METRICS	December 14, 2023
LEVERAGE
LEVERAGE	80
REFINANCING
REFINANCING	73
LIQUIDITY
LIQUIDITY	70
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	90

ANALYSIS: With an Obermatt Safety Rank of 90 (better than 90% compared with alternatives) for 2023, the company PPL has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of PPL 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 PPL. Leverage is at 80, meaning the company has a below-average debt-to-equity ratio. It has less debt than 80% of its competitors. Refinancing is at a rank of 73, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 73% of its competitors. Finally, Liquidity is also good at a rank of 70, which means that the company generates more profit to service its debt than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 90 (better than 90% compared with alternatives), PPL 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

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Combined financial peformance: PPL Top Financial Performance

COMBINED PERFORMANCE	December 14, 2023
VALUE
VALUE	49
GROWTH
GROWTH	89
SAFETY
SAFETY	70
COMBINED
COMBINED	96

ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), PPL (Electric Utilities, USA) shares have much better financial characteristics than comparable stocks. Shares of PPL are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 89) and are safely financed (Safety Rank of 90, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on PPL's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company PPL exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 89). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 90) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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