PHG
Koninklijke Philips N.V.
Healthcare, Consumer
11/27/2017
Presented
| Date | 11/20/2017 |
| Price | $38.70 |
| Market Cap | $36.81B |
| Ent Value | $45.39B |
| P/E Ratio | 22.77x |
| Book Value | $14.40 |
| Div Yield | 2.32% |
| Shares O/S | 951.26M |
| Ave Daily Vol | 1,639,271 |
| Short Int | N/A |
Current
| Price | $32.13 |
| Market Cap | $30.01B |
| Koninklijke Philips N.V. is a technology company, which engages in the healthcare, lighting, and consumer well-being markets. It operates through the following segments: Personal Health Businesses, Diagnosis & Treatment Businesses, Connected Care & Health Informatics Businesses, Healthtech Other, Lighting, and Legacy Items. The Personal Health Businesses segment comprises of products in the following areas: health and wellness, personal care, domestic appliances, and sleep and respiratory care. The Diagnosis & Treatment Businesses segment delivers precision medicine and least-invasive treatment and therapy, such as diagnostic imaging, image-guided therapy, and ultrasound. The Connected Care & Health Informatics Businesses segment provides patient care and monitoring solutions; healthcare informatics, solutions and services; and population health management. The HealthTech Other segment focuses on new technologies, new business creation, and intellectual property management and development. The Lighting segment consists of lighting products, systems, and services. The Legacy Items segment comprises of separation costs, legacy legal items, legacy pension costs, environmental provisions, and stranded costs. The company was founded by Anton Frederik Philips and Gerard Leonard Frederik Philips in 1891 and is headquartered in Amsterdam, Netherlands. |
Publicly traded companies mentioned herein: Koninklijke Philips NV (PHG, PHIA NA), Masimo Corporation (MASI), Philips Lighting NC (LIGHT NA), Procter & Gamble Company (PG), ResMed Inc (RMD), Siemens AG (SIE GR)
Highlights
The presenter is long shares of Philips NV (PHG) and sees the risk/ reward as favorable now that the company has shed its light bulb business and is more focused on “HealthTech” and personal care products. The roughly €31bn market cap company is dual listed in the US ($38.70) and Netherlands (PHIA NA; ~€33), and liquidity is “reasonably good” in both markets. New PHG’s first Capital Markets Day was in early November 2017, and the focus was clearly about how the product portfolio has been narrowed. With the stock in the low €30s, there is the potential for it to double as margins expand and the market re-rates the multiple closer to the “right” peer group (P&G and ResMed). A low 20s multiple on his 2019 FCF per share estimate of €2.75 equates to a mid-€60s target in 12-24 months.
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