Philips Looks Better Without Lights
The company's refreshed portfolio and increasing recurring revenue stream support our bullish stance.
At its capital market day last week, Philips (PHG)/(PHIA) confirmed its midterm targets and offered additional information about its refreshed product portfolio and ability to navigate the challenges of increasingly bundled purchasing behavior by shifting to a “continued engagement” model from a transactional model.
This supports our view of sustainable high growth and value creation. With strong intangible assets and increasing switching costs as the foundations of Philips’ healthtech moat, returns on invested capital are on the rise and substantially outweigh the company’s cost of capital.
Jeffrey Vonk does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.