August 24, 2023
Top 10 Stock Swedbank 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: Swedbank – Top 10 Stock in Optionsmäklarna Stockholm Stock Exchange Stockholm Index OMX 30
Swedbank 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. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 51 (high 51% performer), Obermatt assesses an overall buy recommendation for Swedbank on August 24, 2023.
Snapshot: Obermatt Ranks
| Country | Sweden |
| Industry | Diversified Banks |
| Index | Employee Focus EU, Diversity Europe, Renewables Users, 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 Swedbank Buy
| 360 METRICS | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 44 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| SENTIMENT | ||||||||
| SENTIMENT | 47 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock Swedbank are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Swedbank. 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 34, which means that the share price of Swedbank 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 44, 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 47, which means that professional investors are more pessimistic about the stock than for 53% 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 51, Swedbank is better positioned than 51% 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 47. The negative market view on Swedbank 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
Sentiment Strategy: Professional Market Sentiment for Swedbank only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 47 (better than 47% compared with alternatives), overall professional sentiment and engagement for the stock Swedbank 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 Swedbank. Analyst Opinions are at a rank of 29 (worse than 71% 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 91, 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 Swedbank. More encouragingly, the Professional Investors rank is 94, which means that professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 7, 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 93% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 47 (less encouraging than 53% compared with investment alternatives), Swedbank has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Swedbank. 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: Swedbank Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), Swedbank 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 Swedbank. 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 Swedbank'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 36, which means that the stock price is lower as regards to invested capital than for 36% of comparable investments. On the other hand, Price-to-Sales is less favorable than 75% of alternatives (only 25% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 17% 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 34, is a hold recommendation based on Swedbank'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
Growth Strategy: Swedbank Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 44 (better than 44% compared with alternatives), Swedbank 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 Swedbank. Profit Growth has a rank of 71, which means that currently professionals expect the company to grow its profits more than 71% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 73 (above 73% of alternative investments). But Sales Growth has a below the median rank of 17, which means that, currently, professionals expect the company to grow less than 83% of its competitors, and Capital Growth also has a lower rank of 39. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 44, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Swedbank. ...read more
Safety Strategy: Swedbank Debt Financing Safety above-average
| SAFETY METRICS | August 24, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 74 |
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ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company Swedbank 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 Swedbank 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 Swedbank. Refinancing is at 64, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Liquidity is also good at 98, meaning the company generates more profit to service its debt than 98% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 15, which means the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 74 (better than 74% compared with alternatives), Swedbank 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 Swedbank 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: Swedbank Above-Average Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 34 |
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| GROWTH | ||||||||
| GROWTH | 44 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 56 |
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ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Swedbank (Diversified Banks, Sweden) shares have above-average financial characteristics compared with similar stocks. Shares of Swedbank are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives) and show below-average growth (Growth Rank of 44) but are safely financed (Safety Rank of 74), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Swedbank's financial characteristics. As the company Swedbank's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 34) and low growth (Obermatt Growth Rank of 44), 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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