May 18, 2023
Top 10 Stock Equinor 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: Equinor – Top 10 Stock in Oil & Gas Mining and Production
Equinor is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas 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 negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 69 (high 69% performer), Obermatt assesses an overall buy recommendation for Equinor on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | Norway |
| Industry | Oil & Gas Integrated |
| Index | Low Emissions, Moonshot Tech, Oil & Gas, OBX Index |
| 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° Assessment Equinor Buy
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 77 |
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| SENTIMENT | ||||||||
| SENTIMENT | 49 |
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| 360° VIEW | ||||||||
| 360° VIEW | 69 |
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ANALYSIS: With an Obermatt 360° View of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Equinor are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Equinor. The consolidated Value Rank has an attractive rank of 65, which means that the share price of Equinor 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 65% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 77. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 49. Professional investors are more confident in 51% other stocks. The consolidated Growth Rank also has a low rank of 41, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 59 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 69, Equinor is better than 69% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 65), and the financing structure is on the safer side (Safety Rank of 77). However, sentiment in the professional investor community is below-average (Sentiment Rank of 49), as is the growth momentum for the company (Growth Rank of 41). While everybody wants to buy at low stock prices (good value), professionals’ skepticism may mean that the low price is justified. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still 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 Equinor only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 49 (better than 49% compared with alternatives), overall professional sentiment and engagement for the stock Equinor is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Equinor. Analyst Opinions are at a rank of 14 (worse than 86% 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 47, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 94, which means that professional investors hold more stock in this company than in 94% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 58, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 58% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Equinor and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 49 (less encouraging than 51% compared with investment alternatives), Equinor has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Equinor Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), Equinor 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 Equinor. Price-to-Profit (also referred to as price-earnings, P/E) is 57 which means that the stock price compared with what market professionals expect for future profits is lower than for 57% of comparable companies, indicating a good value concerning Equinor's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with an Price-to-Book Rank of 36, which means that the stock price is lower compared with invested capital than for 36% of comparable investments. On the other hand, Price-to-Sales is less favorable than 54% of alternatives (only 46% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 8% 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 65, is a BUY recommendation based on Equinor'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. This needs to be investigated, and the company's optimism verified before deciding to buy the stock. ...read more
Growth Strategy: Equinor Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Equinor 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 Equinor. Capital Growth has a rank of 85, which means that currently professionals expect the company to grow its invested capital more than 19% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 57 (above 57% of alternative investments). But Sales Growth has only a rank of 20, which means that, currently, professionals expect the company to grow less than 80% of its competitors, and Profit Growth is also low at a rank of 19. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a HOLD recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Equinor, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Equinor Debt Financing Safety very solid
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 49 |
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| REFINANCING | ||||||||
| REFINANCING | 72 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 77 |
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ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2023, the company Equinor has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Equinor 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 Equinor. Refinancing is at 72, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 72% of its competitors. Liquidity is also good at 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 49, which means the company has an above-average debt-to-equity ratio. It has more debt than 51% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives), Equinor has a financing structure that is significantly 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 Equinor 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: Equinor Above-Average Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 73 |
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ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Equinor (Oil & Gas Integrated, Norway) shares have above-average financial characteristics compared with similar stocks. Shares of Equinor are a good value (attractively priced) with a consolidated Obermatt Value Rank of 65 (better than 65% of alternatives), are safely financed (Safety Rank of 77, which means low debt burdens), but show below-average growth (Growth Rank of 41). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 73, is a buy recommendation based on Equinor's financial characteristics. As the company Equinor's key financial metrics exhibit good value (Obermatt Value Rank of 65) but low growth (Obermatt Growth Rank of 41) while being safely financed (Obermatt Safety Rank of 77), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 65% 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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