Testing giant SGS reported a decent start to the year in its sales update, with first-quarter revenue growth of 7% on an organic basis, in line with management’s full-year guidance of mid- to high-single-digit growth. We reiterate our CHF 90 fair value estimate and see moderate upside from the prevailing share price.
As the largest company in the sector, SGS boasts a strong brand, diversified revenue base, and scale, allowing it significant competitive advantages that should persist.
Large exposure to commodity-related sectors could hurt the company’s ability to grow as quickly as hoped over the next few years.
|
Metric
|
SGSN
|
ERF
|
BVI
|
|---|---|---|---|
Price/Earnings (Normalized) | 22.29 | 19.96 | 19.32 |
Price/Book Value | 33.43 | 2.71 | 6.42 |
Price/Sales | 2.33 | 1.75 | 2.14 |
Price/Cash Flow | 14.05 | 11.27 | 14.65 |
|
Metric
|
SGSN
|
ERF
|
BVI
|
|---|---|---|---|
Quick Ratio | 1.18 | 1.34 | 1.67 |
Current Ratio | 1.21 | 1.45 | 1.67 |
Interest Coverage | 12.17 | 4.18 | 8.40 |
|
Metric
|
SGSN
|
ERF
|
BVI
|
|---|---|---|---|
Return on Assets (Normalized) | 10.17% | 5.44% | 8.25% |
Return on Equity (Normalized) | 146.09% | 13.87% | 31.39% |
Return on Invested Capital (Normalized) | 14.72% | 7.66% | 12.79% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
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BAH
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SGSOF
| SGS AG | — | Xkxx | $16.7 Bil | |
SGSOY
| SGS AG ADR | — | Tvcc | $16.7 Bil | |
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