Skip to Content

Koninklijke Philips NV ADR PHG

Morningstar Rating
$26.98 +0.47 (1.77%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

Philips Earnings: Reaches $1.1 Billion Settlement Agreement; Maintaining EUR 21 Fair Value Estimate

Narrow-moat Philips' shares jumped 30% in early April 29 trading after the firm reached an agreement to resolve economic loss, personal injury, and medical monitoring litigation for sleep therapy devices in the US for $1.1 billion or EUR 982 million. The stock market liked the news as investors were likely anticipating a higher settlement amount. This agreement ends a large amount of Philips’ litigation uncertainty as the majority of cases were related to sleep apnea patients. Philips also admitted no fault, liability, or that any injuries were caused by the devices. Management estimates most of the claimants have already submitted a claim given the long period since the recall was initiated and the case has been advertised for three years. Philips still needs to be investigated by the Department of Justice, which management did not comment on, and reach an agreement over ventilation devices although the number of affected patients from ventilation devices is significantly lower than for sleep devices. We maintain our EUR 21 fair value estimate after adjusting our forecasts and given the settlement amount was aligned with our estimates.

Price vs Fair Value

PHG is trading at a 687% premium.
Price
$26.98
Fair Value
$92.44
Uncertainty
High
1-Star Price
$38.58
5-Star Price
$31.37
Economic Moat
Hydjbkp
Capital Allocation
Fkghtjj

Bulls Say, Bears Say

Bulls

Philips' large installed base in imaging devices and existing footprint in many hospitals is an advantage that allows it to cross-sell and introduce new products with less effort than other smaller players.

Bears

The continued transition to value-based care in many parts of the world will result in structural price declines for Philips' imaging business.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if PHG is a good fit for your portfolio.

News

Trading Information

Previous Close Price
$26.51
Day Range
$26.7227.04
52-Week Range
$17.1628.47
Bid/Ask
$26.65 / $27.26
Market Cap
$25.29 Bil
Volume/Avg
1.1 Mil / 1.2 Mil

Key Statistics

Price/Earnings (Normalized)
19.58
Price/Sales
1.36
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
2.86%

Company Profile

Philips is a diversified global healthcare company operating in three segments: diagnosis and treatment, connected care, and personal health. Around 50% of the company's revenue comes from the diagnosis and treatment segment, which features imaging systems, ultrasound equipment, image-guided therapy solutions and healthcare informatics. The connected care segment (around 30% of revenue) encompasses monitoring and analytics systems for hospitals and sleep and respiratory care devices, whereas the personal health business (remainder of revenue) includes electric toothbrushes and men's grooming and personal-care products.
Sector
Healthcare
Industry
Medical Devices
Stock Style Box
Large Core
Total Number of Employees
73,712

Competitors

Valuation

Metric
PHG
GE
SIE
Price/Earnings (Normalized)
19.5849.9517.64
Price/Book Value
1.926.143.03
Price/Sales
1.362.651.82
Price/Cash Flow
28.5843.7712.33
Price/Earnings
PHG
GE
SIE

Financial Strength

Metric
PHG
GE
SIE
Quick Ratio
0.740.761.07
Current Ratio
1.201.171.41
Interest Coverage
−1.605.225.75
Quick Ratio
PHG
GE
SIE

Profitability

Metric
PHG
GE
SIE
Return on Assets (Normalized)
2.83%4.09%
Return on Equity (Normalized)
15.41%12.81%
Return on Invested Capital (Normalized)
9.19%5.07%
Return on Assets
PHG
GE
SIE
See how this stock stacks up to its competitors with Morningstar Investor

Medical Devices Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
ABT
Abbott LaboratoriesBkykvfjzxQdsxgd$181.3 Bil
SYK
Stryker CorpKgvjddmbCfsb$127.8 Bil
BSX
Boston Scientific CorpPybkbbhjRxdjjsc$111.2 Bil
MDT
Medtronic PLCJcjgvzvhLdlvwh$107.9 Bil
EW
Edwards Lifesciences CorpHlgtrnfjtMynvyd$53.0 Bil
DXCM
DexCom IncVjbtxfvyfYhvtt$50.4 Bil
ZBH
Zimmer Biomet Holdings IncTdlttycrMrctp$23.9 Bil
ALGN
Align Technology IncYzdtvmbYpjtwg$19.2 Bil
PODD
Insulet CorpRjdbmydsMdvnl$12.7 Bil

Sponsor Center