Koninklijke Philips (PHG) AI Stock Analysis

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Koninklijke Philips

(NYSE:PHG)

49Neutral

Philips faces significant challenges with declining revenues and profitability pressures, reflected in the lower income and valuation scores. However, strong cash flow management and operational improvements provide a foundation for potential recovery. The stock's bearish technical indicators suggest caution, yet the positive elements from the earnings call offer a balanced view for moderate optimism if strategic initiatives succeed.

Koninklijke Philips (PHG) vs. S&P 500 (SPY)

Market Cap

$23.51B

Dividend YieldN/A

Average Volume (3M)985.67K

Price to Earnings (P/E)―

Beta (1Y)0.84

Revenue Growth-0.76%

EPS Growth-55.03%

CountryUS

Employees66,678

SectorHealthcare

Sector Strength74

IndustryMedical - Devices

Share Statistics

EPS (TTM)-0.82

Shares Outstanding939,939,400

10 Day Avg. Volume679,901

30 Day Avg. Volume985,666

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$26.00

Price Target Upside4.08% Upside

Rating ConsensusHold

Number of Analyst Covering1

Koninklijke Philips Business Overview & Revenue Model

Company DescriptionKoninklijke Philips N.V., commonly known as Philips, is a leading health technology company headquartered in the Netherlands. The company focuses on improving people's health and well-being through meaningful innovation in the areas of healthcare, consumer lifestyle, and lighting solutions. Philips operates through several segments, including Diagnosis & Treatment, Connected Care, and Personal Health, offering products such as imaging systems, patient monitoring devices, and personal health products like electric toothbrushes and grooming devices.

How the Company Makes MoneyPhilips generates revenue primarily through the sale of its innovative health technology products and services. The Diagnosis & Treatment segment contributes significantly to the company's earnings, offering advanced imaging systems, ultrasound, and healthcare informatics solutions to healthcare providers. The Connected Care segment provides patient monitoring and analytics services, while the Personal Health segment offers consumer health products such as oral care, grooming, and mother and child care products. Philips also engages in strategic partnerships and collaborations with hospitals, healthcare systems, and research institutions to enhance its product offerings and expand its market reach, further driving revenue growth.

Koninklijke Philips Financial Statement Overview

Summary

Koninklijke Philips is experiencing financial difficulties with declining revenues and net losses. While maintaining a stable balance sheet and positive cash flows, profitability and equity are under pressure. The company shows potential for recovery if operational improvements continue and revenue growth resumes.

Income Statement

Neutral

Koninklijke Philips has experienced a declining revenue trend from its peak in 2020. The gross profit margin has also decreased over the years, indicating challenges in cost management or pricing power. The company has been suffering net losses in recent years, which impacts the net profit margin negatively. The EBIT margin is low, though there has been an improvement in the latest year, suggesting some operational recovery. Overall, the income statement reflects a company facing profitability challenges with some signs of stabilization.

Balance Sheet

Neutral

The balance sheet shows a moderate debt-to-equity ratio, which suggests a balanced leverage position but with room for improvement. The equity ratio indicates a relatively stable financial foundation, though the decline in stockholders' equity over recent years could be a concern. Return on equity is negative due to net losses, highlighting the need for improved profitability. Overall, the balance sheet reveals a stable yet potentially vulnerable position due to ongoing losses.

Cash Flow

Neutral

Philips has managed to generate positive operating cash flow, with free cash flow remaining positive recently, despite capital expenditures. The free cash flow growth rate has been fluctuating, reflecting challenges in maintaining consistent cash generation. The operating cash flow to net income ratio is healthy, indicating that cash generation is stronger than earnings performance would suggest. Overall, the cash flow statement shows resilience in cash management but underscores the need to enhance earnings quality.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
18.02B	18.17B	17.83B	17.16B	19.54B
	Gross Profit
7.77B	7.45B	7.19B	7.17B	8.78B
	EBIT
529.00M	-115.00M	-116.00M	553.00M	1.54B
	EBITDA
1.92B	1.04B	115.00M	2.00B	2.75B
	Net Income Common Stockholders
-702.00M	-466.00M	-1.62B	612.00M	1.19B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.40B	1.87B	1.18B	2.31B	3.23B
	Total Assets
28.98B	29.41B	30.69B	30.96B	27.71B
	Total Debt
7.64B	7.61B	8.20B	6.98B	6.93B
	Net Debt
5.24B	5.74B	7.03B	4.68B	3.71B
	Total Liabilities
16.93B	17.34B	17.41B	16.49B	15.81B
	Stockholders Equity
12.01B	12.03B	13.25B	14.44B	11.87B
Cash Flow		Free Cash Flow
893.00M	1.49B	-979.00M	866.00M	1.83B
	Operating Cash Flow
1.56B	2.14B	-173.00M	1.63B	2.78B
	Investing Cash Flow
-573.00M	-636.00M	-1.49B	-3.67B	-1.32B
	Financing Cash Flow
-496.00M	-848.00M	500.00M	-2.35B	483.00M

Koninklijke Philips Technical Analysis

Technical Analysis Sentiment

Negative

Last Price24.98

Price Trends

50DMA

25.21

Negative

100DMA

25.75

Negative

200DMA

27.39

Negative

Market Momentum

MACD

0.02

Negative

RSI

53.30

Neutral

STOCH

90.40

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHG, the sentiment is Negative. The current price of 24.98 is above the 20-day moving average (MA) of 23.82, below the 50-day MA of 25.21, and below the 200-day MA of 27.39, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 53.30 is Neutral, neither overbought nor oversold. The STOCH value of 90.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PHG.

Koninklijke Philips Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SYK	78 Outperform	$142.75B	48.18	15.26%	0.88%	10.23%	-5.74%
BSX	76 Outperform	$138.54B	75.09	9.03%	―	19.35%	14.31%
ABT	74 Outperform	$220.05B	16.61	30.95%	1.71%	5.00%	―
EW	71 Outperform	$40.65B	28.33	17.17%	―	-9.84%	6.19%
SSKN	54 Neutral	$11.26M	―	-114.22%	―	0.61%	16.43%
Sector *	52 Neutral	$5.28B	3.75	-42.72%	2.86%	17.70%	2.03%
PHG	49 Neutral	$23.51B	―	-7.10%	―	-0.76%	-55.03%

* Healthcare Sector Average

Performance Comparison

PHG

Koninklijke Philips

24.98

-0.90

-3.48%

ABT

Abbott Laboratories

130.88

27.06

26.06%

BSX

Boston Scientific

103.19

30.34

41.65%

Edwards Lifesciences

75.18

-10.07

-11.81%

SSKN

Strata Skin Sciences

2.70

-1.47

-35.25%

SYK

Stryker

373.99

48.55

14.92%

Koninklijke Philips Earnings Call Summary

Earnings Call Date:Feb 19, 2025

(Q4-2024)

% Change Since: -11.76%|

Next Earnings Date:May 06, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong profitability and order growth outside China, driven by innovation and productivity savings. However, significant challenges remain, particularly with the continued impact of the Respironics recall and the substantial decline in China sales. The company's cautious outlook for 2025 reflects these ongoing challenges.

Q4-2024 Updates

Positive Updates

Strong Profitability and Cash Flow

The company delivered strong profitability improvement and cash flow in Q4 and for the full year 2024, with an adjusted EBITA margin increase of 90 basis points versus 2023.

Order and Sales Growth

Comparable order and sales grew low single digit in the quarter and the year, with orders growing 2% driven by strong growth in the US and in growth regions, despite a double-digit decline in China.

Productivity Savings and Innovation

Productivity savings of over EUR1.7 billion in the last two years, with innovations accounting for 50% of sales from new and upgraded products launched in the last three years.

Dividend Proposal

A dividend of EUR0.85 per share was proposed, payable in shares or cash, indicating confidence in the company's long-term plan and strong balance sheet.

AI-Driven Innovation

Introduction of AI-driven innovations such as the helium-free MRI scanner and strategic partnerships for imaging and health informatics platforms.

Negative Updates

Decline in China Sales

China experienced a double-digit decline in sales, significantly impacting overall performance with expectations of continued mid- to high single-digit declines in 2025.

Respironics Recall Challenges

Continued challenges and high restructuring charges related to the Respironics recall, with additional costs expected in 2025.

Net Income Decrease

Net income decreased by EUR371 million in the quarter due to higher tax expenses, write-down of intangible assets, and restructuring charges.

High Restructuring and Other Charges

High restructuring and other charges due to efforts in resolving the Respironics recall and operational changes.

Company Guidance

During the Royal Philips fourth quarter and full year 2024 results conference call, CEO Roy Jakobs and CFO Charlotte Hanneman highlighted several key metrics and strategic priorities. They reported a 1% growth in comparable sales and orders for the full year, with a notable 5% growth in the rest of the world, countering a double-digit decline in China. The adjusted EBITA margin improved by 90 basis points to 11.5% for the full year, with a strong free cash flow of EUR 0.9 billion. The company achieved productivity savings of over EUR 1.7 billion over the past two years and plans to increase savings targets to EUR 2.5 billion by 2025. They anticipate 1% to 3% sales growth in 2025, despite ongoing challenges in China, and expect margin expansion of 30 to 80 basis points, driven by continuous investment in innovations and operational improvements. Philips proposed a dividend of EUR 0.85 per share, payable in shares or cash, reflecting their robust balance sheet. The company remains focused on resolving the Respironics recall and enhancing supply chain efficiency, while leveraging AI-driven innovations to maintain its market position.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.