Koninklijke Philips (PHG) AI Stock Analysis

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Koninklijke Philips

(NYSE:PHG)

Rating:50Neutral

Price Target:

$23.50

▼(-0.51%Downside)

Philips' overall stock score reflects a challenging financial and valuation environment, with some operational resilience. Financial performance is under pressure due to declining revenues and net losses, while technical analysis suggests cautious sentiment. The earnings call provided some optimism with innovation impact and operational efficiency, but risks from tariffs and China sales decline remain. The valuation is weakened by a negative P/E ratio, though the dividend yield offers slight support.

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

Market Cap

$22.89B

Dividend Yield3.75%

Average Volume (3M)1.25M

Price to Earnings (P/E)―

Beta (1Y)0.82

Revenue Growth-0.76%

EPS Growth-55.03%

CountryUS

Employees67,247

SectorHealthcare

Sector Strength55

IndustryMedical - Devices

Share Statistics

EPS (TTM)0.28

Shares Outstanding962,920,100

10 Day Avg. Volume1,309,611

30 Day Avg. Volume1,246,471

Financial Highlights & Ratios

PEG Ratio0.02

Price to Book (P/B)0.93

Price to Sales (P/S)0.00

P/FCF Ratio-12.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$28.15

Price Target Upside19.18% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Koninklijke Philips Business Overview & Revenue Model

Company DescriptionKoninklijke Philips N.V. operates as a health technology company in North America and internationally. It operates through Diagnosis & Treatment Businesses, Connected Care Businesses, and Personal Health Businesses segments. The company provides diagnostic imaging solutions, includes magnetic resonance imaging, computed tomography (CT) systems, X-ray systems, and detector-based spectral CT solutions, as well as molecular and hybrid imaging solutions for nuclear medicine; integrated interventional systems; echography solutions focused on diagnosis, treatment planning and guidance for cardiology, general imaging, obstetrics/gynecology, and point-of-care applications; proprietary software to enable diagnostics and intervention; and enterprise diagnostic informatics products and services. It also offers acute patient management solutions; emergency care solutions; sleep and respiratory care solutions; and electronic medical record and care management solutions. In addition, the company provides power toothbrushes, brush heads, and interdental cleaning and teeth whitening products; infant feeding and digital parental solutions; and male grooming and beauty products and solutions. It has a strategic collaboration with Ibex Medical Analytics Ltd. to jointly promote the digital pathology and AI solutions to hospitals, health networks, and pathology laboratories worldwide, as well as a strategic partnership agreement with NICO.LAB. The company was formerly known as Koninklijke Philips Electronics N.V. and changed its name to Koninklijke Philips N.V. in May 2013. Koninklijke Philips N.V. was founded in 1891 and is headquartered in Amsterdam, the Netherlands.

How the Company Makes MoneyPhilips generates revenue through the sale of its health technology products and services. The company's revenue streams include the sale of medical diagnostic imaging equipment, patient monitoring devices, and personal health products, such as sleep and respiratory care devices. Additionally, Philips earns income from providing healthcare consulting, software solutions, and maintenance services to hospitals and healthcare providers. Strategic partnerships with healthcare institutions, governments, and technology companies also contribute to its earnings, as does its focus on expanding its presence in emerging markets. Philips' business model relies heavily on innovation, leveraging its research and development capabilities to sustain growth and adapt to the evolving healthcare landscape.

Koninklijke Philips Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -5.03%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Neutral

The earnings call indicated a mixed sentiment. Philips demonstrated strong innovation impact and resilience in EBITA margin, despite significant headwinds from tariffs and challenges in the Chinese market. The company is actively working on mitigation strategies, but uncertainties related to tariffs and market dynamics in China pose ongoing risks.

Q1-2025 Updates

Positive Updates

Order Intake Growth Despite Challenges

Order intake grew despite a double-digit decline in China, driven by double-digit order intake growth in North America and strength in Diagnosis & Treatment.

Strong Innovation Impact

More than 50% of sales are fueled by AI-driven innovations from new and upgraded products launched in the last three years, showcasing the power of Philips' innovation strategy.

Resilient Adjusted EBITA Margin

Adjusted EBITA margin delivery was resilient at 8.6% despite lower sales, driven by productivity measures and innovation.

Improved Free Cash Flow Excluding Settlement

Excluding the €1 billion Respironics settlement payment, free cash flow increased by €270 million year-on-year, driven by higher earnings and lower working capital outflows.

Negative Updates

China Market Challenges

Sales in China faced a double-digit decline across all segments due to subdued consumer sentiment and inventory destocking in Personal Health.

Tariff Impact on Financial Outlook

The impact of announced tariffs is estimated at €250 million to €300 million net, leading to a reduction in adjusted EBITA margin guidance to 10.8% to 11.3% from 11.8% to 12.3%.

Negative Free Cash Flow After Settlement

Free cash flow was an outflow of €1.1 billion, primarily due to a €1 billion payment related to the Respironics recall-related settlements in the US.

Flat to Declining Sales in Q2

Guidance indicates that Q2 sales may remain flat or slightly decline compared to Q1, impacted by ongoing challenges in China and tariff effects.

Company Guidance

During the first-quarter 2025 earnings call, Royal Philips provided guidance that highlighted a continued expectation of 1% to 3% in comparable sales growth for the full year. The company projected an adjusted EBITA margin of 10.8% to 11.3%, reflecting a 100 basis points adjustment due to tariffs, net of significant mitigation actions. Free cash flow is anticipated to be slightly positive, considering a €1 billion outflow related to the Respironics settlement. Order intake showed a 4% increase in the quarter, driven by strong growth in Diagnosis & Treatment and robust double-digit growth in North America. Despite a double-digit decline in China, the momentum from innovations and productivity measures helped improve gross margins and maintain resilience in adjusted EBITA margin. Philips emphasized its proactive measures to counter tariffs, including optimizing supply chains, selective pricing, and leveraging partnerships, while maintaining a strong focus on innovation and operational efficiency to support sustainable growth.

Koninklijke Philips Financial Statement Overview

Summary

Koninklijke Philips is experiencing financial strain with declining revenues and net losses. The income statement reveals profitability challenges, though there are signs of stabilization. The balance sheet is stable but vulnerable due to ongoing losses, while the cash flow statement indicates resilience in cash management. Overall, financial performance reflects a company under pressure, needing revenue growth and cost efficiency improvements.

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
17.98B	18.02B	18.17B	17.83B	17.16B	19.54B
	Gross Profit
7.81B	7.77B	7.45B	7.19B	7.17B	8.78B
	EBIT
1.51B	529.00M	-115.00M	-116.00M	553.00M	1.54B
	EBITDA
2.10B	1.92B	1.04B	115.00M	2.00B	2.75B
	Net Income Common Stockholders
373.00M	-702.00M	-466.00M	-1.62B	612.00M	1.19B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.20B	2.40B	1.87B	1.18B	2.31B	3.23B
	Total Assets
27.17B	28.98B	29.41B	30.69B	30.96B	27.71B
	Total Debt
7.57B	7.49B	7.61B	8.20B	6.98B	6.93B
	Net Debt
6.38B	5.09B	5.74B	7.03B	4.68B	3.71B
	Total Liabilities
15.44B	16.93B	17.34B	17.41B	16.49B	15.81B
	Stockholders Equity
11.70B	12.01B	12.03B	13.25B	14.44B	11.87B
Cash Flow		Free Cash Flow
-20.00M	893.00M	1.49B	-979.00M	866.00M	1.83B
	Operating Cash Flow
807.00M	1.57B	2.14B	-173.00M	1.63B	2.51B
	Investing Cash Flow
-320.00M	-573.00M	-636.00M	-1.49B	-3.67B	-1.27B
	Financing Cash Flow
425.00M	-496.00M	-848.00M	500.00M	-2.35B	483.00M

Koninklijke Philips Technical Analysis

Technical Analysis Sentiment

Positive

Last Price23.62

Price Trends

50DMA

23.38

Positive

100DMA

24.62

Negative

200DMA

26.05

Negative

Market Momentum

MACD

-0.05

Negative

RSI

52.24

Neutral

STOCH

83.40

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PHG, the sentiment is Positive. The current price of 23.62 is above the 20-day moving average (MA) of 23.36, above the 50-day MA of 23.38, and below the 200-day MA of 26.05, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 52.24 is Neutral, neither overbought nor oversold. The STOCH value of 83.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PHG.

Koninklijke Philips Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABT	80 Outperform	$233.36B	17.40	30.66%	1.74%	5.00%	139.98%
SYK	78 Outperform	$145.64B	51.43	14.26%	0.88%	10.76%	-15.22%
BSX	71 Outperform	$146.97B	72.83	9.65%	―	19.35%	14.31%
EW	71 Outperform	$44.27B	50.70	16.73%	―	-9.84%	-35.77%
SSKN	54 Neutral	$9.80M	―	-151.23%	―	3.30%	31.84%
Sector *	54 Neutral	$5.38B	3.31	-45.11%	3.29%	16.82%	0.04%
PHG	50 Neutral	$22.89B	―	-7.10%	3.75%	-0.76%	-55.03%

* Healthcare Sector Average

Performance Comparison

PHG

Koninklijke Philips

23.62

-1.30

-5.22%

ABT

Abbott Laboratories

136.45

34.81

34.25%

BSX

Boston Scientific

98.56

21.80

28.40%

Edwards Lifesciences

75.89

-11.40

-13.06%

SSKN

Strata Skin Sciences

2.25

-0.85

-27.42%

SYK

Stryker

380.49

38.67

11.31%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.