January 11, 2024
Top 10 Stock UCB Hold 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: UCB – Top 10 Stock in Belgian 20 Index BEL20
UCB is listed as a top 10 stock on January 11, 2024 in the market index BEL20 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 below average and thus a signal for caution. Based on the Obermatt 360° View of 41 (41% performer), Obermatt assesses an overall hold recommendation for UCB on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Pharmaceuticals |
| Index | BEL20, Human Rights |
| Size class | X-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 UCB Hold
| 360 METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 81 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 64 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 24 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 18 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 41 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and financial characteristics for the stock UCB are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for UCB. The consolidated Value Rank has an attractive rank of 81, which means that the share price of UCB is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 81% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 64, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 18. Professional investors are more confident in 82% other stocks. Worryingly, the company has risky financing, with a Safety rank of 24. This means 76% of comparable companies have a safer financing structure than UCB. ...read more
RECOMMENDATION: With a consolidated 360° View of 41, UCB is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 81 and the Growth Rank above-average at 64, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 18. In addition, the company financing structure is on the riskier side (Safety Rank of 24). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should 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 UCB negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock UCB is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for UCB. Analyst Opinions are at a rank of 35 (worse than 65% 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 12, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 47, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 53% of competitors). On the upside, the Professional Investors rank is 54, which means that professional investors hold more stock in this company than in 54% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), UCB has a reputation among professional investors that is far below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make UCB stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: UCB Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2024, UCB shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for UCB. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 53 which means that the stock price compared with what market professionals expect for future profits is lower than for 53% of comparable companies, indicating a good value concerning UCB'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 83, 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 52% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 48). 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 81, is a buy recommendation based on UCB'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 UCB 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 UCB shares. ...read more
Growth Strategy: UCB Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 64 (better than 64% compared with alternatives), UCB shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for UCB. Sales Growth has a rank of 55 which means that currently, professionals expect the company to grow more than 55% of its competitors. Both Profit Growth, with a rank of 78, and Stock Returns, with a rank of 60, are also above average. But Capital Growth only has a rank of 33, which means that, currently, professionals expect the company to grow its invested capital less than 67% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 64, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: UCB Debt Financing Safety risky
| SAFETY METRICS | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 48 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 19 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 40 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 24 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 24 (better than 24% compared with alternatives), the company UCB has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of UCB is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for UCB. Liquidity is at 40, meaning that the company generates less profit to service its debt than 60% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Finally, Refinancing is at a rank of 19 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 81% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 24 (worse than 76% compared with alternatives), UCB has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: UCB Above-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 81 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 64 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 40 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 66 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 66 (better than 66% compared with investment alternatives), UCB (Pharmaceuticals, Belgium) shares have above-average financial characteristics compared with similar stocks. Shares of UCB are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives), show above-average growth (Growth Rank of 64) but are riskily financed (Safety Rank of 24), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 66, is a buy recommendation based on UCB's financial characteristics. As the company UCB's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 81) and above-average growth (Obermatt Growth Rank of 64), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 24) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.