December 28, 2023
Top 10 Stock Equinor 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 Equinor Hold

360 METRICS	December 28, 2023
VALUE
VALUE	43
GROWTH
GROWTH	43
SAFETY
SAFETY	74
SENTIMENT
SENTIMENT	15
360° VIEW
360° VIEW	32

ANALYSIS: With an Obermatt 360° View of 32 (better than 32% compared with alternatives), overall professional sentiment and financial characteristics for the stock Equinor are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Equinor. The only rank that is above average is the consolidated Safety Rank at 74, which means that the company has a financing structure that is safer than those of 74% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 43, which means that the share price of Equinor is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 43, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 15, which means that professional investors are more pessimistic about the stock than for 85% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more

RECOMMENDATION: With a consolidated 360° View of 32, Equinor is worse than 68% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 15. The negative market view on Equinor may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. 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. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for Equinor negative

SENTIMENT METRICS	December 28, 2023
ANALYST OPINION
ANALYST OPINION	8
OPINIONS CHANGE
OPINIONS CHANGE	34
PRO HOLDINGS
PRO HOLDINGS	41
MARKET PULSE
MARKET PULSE	40
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	15

ANALYSIS: With an Obermatt Sentiment Rank of 15 (better than 15% compared with alternatives), overall professional sentiment and engagement for the stock Equinor 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 Equinor. Analyst Opinions are at a rank of 8 (worse than 92% 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 34 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 40, 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 60% of competitors). No wonder, the Professional Investors rank is only 41, which means that professional investors hold less stock in this company than in 59% of alternative investment opportunities. Pros tend to stay away from Equinor, 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 15 (less encouraging than 85% compared with investment alternatives), Equinor 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: Equinor Stock Price Value below-average critical

VALUE METRICS	December 28, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	55
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	19
DIVIDEND YIELD
DIVIDEND YIELD	80
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	43

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Equinor 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 Equinor. Price-to-Profit (also referred to as price-earnings, P/E) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% 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 a Price-to-Book Rank of 19, which means that the stock price is lower as regards to invested capital than for 19% of comparable investments. On the other hand, Price-to-Sales is less favorable than 55% of alternatives (only 45% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 20% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold 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. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more

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Growth Strategy: Equinor Growth Momentum low

GROWTH METRICS	December 28, 2023
REVENUE GROWTH
REVENUE GROWTH	36
PROFIT GROWTH
PROFIT GROWTH	21
CAPITAL GROWTH
CAPITAL GROWTH	77
STOCK RETURNS
STOCK RETURNS	45
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	43

ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% 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 three out of four indicators below average for Equinor. Only Capital Growth has a good rank of 77, which means that currently professionals expect the company to grow its invested capital more than 21% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 36 which means that currently professionals expect the company to grow less than 64% of its competitors. Profit Growth with a rank of 21 and Stock Returns with a rank of 45 are also low (below 55% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Equinor is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more

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Safety Strategy: Equinor Debt Financing Safety above-average

SAFETY METRICS	December 28, 2023
LEVERAGE
LEVERAGE	48
REFINANCING
REFINANCING	63
LIQUIDITY
LIQUIDITY	86
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	74

ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company Equinor has financing practices on the safer side, which mean that their overall debt burden is lower than average. 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 63, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Liquidity is also good at 86, meaning the company generates more profit to service its debt than 86% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 48, which means the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 74 (better than 74% compared with alternatives), Equinor has a financing structure that is 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

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Combined financial peformance: Equinor Above-Average Financial Performance

COMBINED PERFORMANCE	December 28, 2023
VALUE
VALUE	43
GROWTH
GROWTH	43
SAFETY
SAFETY	86
COMBINED
COMBINED	63

ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% compared with investment alternatives), Equinor (Oil & Gas Integrated, Norway) shares have above-average financial characteristics compared with similar stocks. Shares of Equinor are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 74), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 63, is a buy recommendation based on Equinor's financial characteristics. As the company Equinor's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 43), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 74) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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