Koninklijke Philips N.V. (PHIA.AS) | Investment Case

1. Company Snapshot

1.a. Company Description

Koninklijke 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.

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1.b. Last Insights on PHIA

Koninklijke Philips N.V.'s recent performance was positively driven by its return to profitability in 2025, with a reported swing to Q4 profit as comparable sales jumped 7% and orders rose. The company's new financial targets for 2026 to 2028, including revenue growth and profit margins, have reset investor sentiment. Additionally, Philips' focus on AI-driven products and partnerships, as well as leadership continuity with the proposed reappointment of CEO Roy Jakobs, have contributed to a positive outlook. The company's recent earnings rebound and proposed dividend have also been key drivers.

1.c. Company Highlights

Last Price	26.32
Change Percentage	-0.30%
Open	26.35
Previous Close	26.4
Market Cap ( Millions)	25038
Volume	1542682
Year High	27.7
Year Low	18.9
M A 50	24.54
M A 200	23.15

FCF Yield	2.80%
Dividend Yield	3.23%
ROE	8.21%
Debt / Equity	73.79%
Net Debt / EBIDTA	195.53%
Price To Book	2.28
Price Earnings Ratio	27.97
Price To FCF	35.72
Price To sales	1.4
EV / EBITDA	11.21

2. Philips' Strong 2025 Results Set Stage for Continued Growth in 2026

Philips reported a robust fourth quarter and full year 2025 results, with comparable sales growth accelerating to 7% and adjusted EBITDA margin expanding 160 basis points to 15.1%. Earnings per share (EPS) came in at 0.6, significantly beating estimates of 0.304. Revenue growth was broad-based across all businesses and geographies, with order intake up 7% year-on-year. The company's strong financial performance was driven by sustained improvement in its Diagnosis & Treatment, Connected Care, and Personal Health segments.

Publication Date: Feb -11

                                    📋 Highlights
                                    Order Intake Growth::
                                                Q4 order intake rose 7% YoY, with full-year D&T up 5% and Connected Care up 7%, reflecting sustained momentum.
EBITDA Margin Expansion::
                                                Q4 adjusted EBITDA margin improved 160 bps to 15.1%, driven by productivity and mix, with full-year margin up 80 bps to 12.3%.
Free Cash Flow Strength::
                                                Generated EUR 1.2 billion in Q4 and EUR 512 million for the full year, with leverage ratio reduced to 1.7x.
Productivity Program::
                                                Launched a EUR 1.5 billion productivity initiative (2026–2028) to offset tariffs and fund margin expansion.
Personal Health Momentum::
                                                Q4 sales surged 14% YoY (full-year +8%), fueled by innovation (e.g., helium-free 3T MRI) and strong North American demand.

                                

Segment Performance

The Diagnosis & Treatment segment delivered comparable sales growth of 4% in the fourth quarter, with Image-Guided Therapy continuing to perform well with double-digit growth. Connected Care reported comparable sales growth of 7% in the fourth quarter, driven by strong demand for monitoring and enterprise informatics solutions in North America. Personal Health had a strong quarter, with comparable sales growth of 14%, driven by market share gains and healthy sell-out trends. As Charlotte Hanneman noted, the high single-digit growth in Personal Health "came in almost twice as expected, driven by broad-based momentum across businesses and geographies."

Outlook for 2026

Philips expects comparable sales growth to accelerate to 3-4.5% in 2026, driven by order intake momentum, innovation, and improved commercial execution. Adjusted EBITDA margin is expected to improve to 12.5-13% despite the impact from tariffs. The company is launching an additional EUR 1.5 billion productivity program for the 2026-2028 period, which is expected to drive margin expansion. With a current P/E Ratio of 161.81 and EV/EBITDA of 16.74, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 4.5%, which is in line with the company's guidance.

Valuation and Cash Flow

Philips generated EUR 1.2 billion of free cash flow in the fourth quarter and EUR 512 million for the full year. The company's leverage ratio improved to 1.7x on a net debt to adjusted EBITDA basis. With a Free Cash Flow Yield of 1.01% and a Dividend Yield of 3.08%, the stock offers a relatively attractive income profile. However, the high P/E Ratio and EV/EBITDA multiple suggest that the stock may be fully valued, leaving limited room for multiple expansion.

3. NewsRoom

Signify share repurchase periodic update

12:00

Source:

High Intensity Focused Ultrasound (HIFU) Market Competitive Landscape Report 2025: Recent Developments, Strategies, Sustainability Benchmarking, Product Launches, Key Persons, and Revenue Forecasts to 2033

Feb -20

Source:

Sleep Aids: Trends, Technologies and Global Markets to 2030 Featuring Key Players Fisher & Paykel Healthcare, ResMed, Philips, Alphabet, Apple and More

Feb -19

Source:

Philips publishes its Annual Report 2025

Feb -19

Source:

Danaher strikes $10bn deal for medical device maker Masimo

Feb -17

Source:

Telemedicine & Digital Health Research Report 2026: A $180 Billion Market by 2031 from $85.5 Billion in 2025 with Teladoc Health, Amwell, Philips, Siemens Healthineers, GE, Medtronic, Oracle Leading

Feb -17

Source:

Philips introduces InkSpace Imaging’s Snuggle™ flexible pediatric MRI coil for its 3.0T MR systems, helping to enhance imaging precision, efficiency and comfort

Feb -12

Source:

Koninklijke Philips N.V. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Feb -12

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.25%)

6. Segments

Diagnosis & Treatment Businesses

Expected Growth: 4.5%

Philips' Diagnosis & Treatment business growth of 4.5% is driven by increasing demand for precision medicine, strong sales of imaging systems, and growing adoption of minimally invasive treatments. Additionally, the company's innovative solutions in radiation therapy and health technology services contribute to its growth momentum.

Connected Care

Expected Growth: 6.0%

Philips' Connected Care growth (6.0%) is driven by increasing demand for healthcare technology, driven by aging populations and COVID-19 pandemic. Strong sales of telehealth, patient monitoring, and medical imaging solutions contribute to growth, as healthcare providers shift towards value-based care and digital transformation.

Personal Health Businesses

Expected Growth: 5.5%

The 5.5% growth in Personal Health Businesses from Koninklijke Philips N.V. is driven by increasing demand for health and wellness products, strong sales of connected health devices, and expanding e-commerce capabilities. Additionally, Philips' innovative product offerings and strategic partnerships have enhanced its market position, contributing to the segment's growth.

Other

Expected Growth: 3.0%

Philips' growth is driven by innovative healthcare solutions, strong demand for consumer electronics, and increasing adoption of LED lighting solutions. The company's focus on digital transformation, strategic partnerships, and expansion into emerging markets also contribute to its growth. Additionally, Philips' commitment to sustainability and improving healthcare outcomes supports its long-term growth prospects.

Inter-Segment Eliminations

Expected Growth: 0.0%

Inter-Segment Eliminations from Koninklijke Philips N.V. with 0.0% growth implies that there are no changes in intersegment transactions or pricing. This stagnation suggests that Philips' business segments are not experiencing significant shifts in demand, cost structures, or supply chain dynamics that would impact intersegment interactions.

7. Detailed Products

Philips TVs

Philips TVs offer a range of display technologies, including LED, OLED, and Ambilight, providing an immersive viewing experience with vibrant colors and contrast.

Philips Healthcare Solutions

Philips Healthcare offers a range of medical imaging, patient monitoring, and health informatics solutions to help healthcare professionals diagnose and treat patients more effectively.

Philips Lighting

Philips Lighting offers a range of lighting solutions, including LED bulbs, luminaires, and smart lighting systems, to provide energy-efficient and sustainable lighting for homes, businesses, and cities.

Philips Sonicare Toothbrushes

Philips Sonicare Toothbrushes use advanced sonic technology to provide a deep and gentle cleaning experience, helping to maintain good oral health.

Philips Coffee Machines

Philips Coffee Machines offer a range of coffee makers, grinders, and brewers, allowing users to create a variety of coffee drinks at home.

Philips Air Purifiers

Philips Air Purifiers use advanced filtration technology to remove pollutants and allergens from the air, improving indoor air quality and health.

Philips Shavers

Philips Shavers offer a range of electric shavers, trimmers, and epilators, providing a close and comfortable shaving experience for men and women.

Philips Monitor

Philips Monitor offers a range of computer monitors, including gaming monitors, 4K monitors, and USB-C monitors, providing high-quality visuals and ergonomic design.

8. Koninklijke Philips N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Philips faces a moderate threat from substitutes as some of its products, such as lighting and consumer electronics, have alternative products available in the market. However, the company's focus on innovation and technology, such as LED lighting and health technology, reduces the threat.

Bargaining Power Of Customers

Philips' customers, particularly in the healthcare and consumer electronics segments, have significant bargaining power due to their large volumes and ability to negotiate prices. This can put pressure on Philips' pricing strategy.

Bargaining Power Of Suppliers

Philips has a diverse supplier base and is not heavily reliant on any single supplier. This reduces the bargaining power of suppliers and allows Philips to negotiate favorable terms.

Threat Of New Entrants

The barriers to entry in Philips' industries, such as healthcare technology and consumer electronics, are high due to significant R&D investments and regulatory requirements. This reduces the threat of new entrants.

Intensity Of Rivalry

The industries in which Philips operates, such as consumer electronics and healthcare technology, are highly competitive with many established players. This leads to intense rivalry and pricing pressure.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	38.42%
Debt Cost	4.28%
Equity Weight	61.58%
Equity Cost	8.41%
WACC	6.82%
Leverage	62.39%

11. Quality Control: Koninklijke Philips N.V. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Synektik

A-Score: 6.3/10

Value: 2.5

Growth: 9.9

Quality: 8.0

Yield: 5.0

Momentum: 8.5

Volatility: 4.0

1-Year Total Return ->

GSK

A-Score: 6.3/10

Value: 4.7

Growth: 2.2

Quality: 7.1

Yield: 6.9

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

STERIS

A-Score: 5.3/10

Value: 1.9

Growth: 6.6

Quality: 7.1

Yield: 1.2

Momentum: 6.5

Volatility: 8.3

1-Year Total Return ->

Sonova

A-Score: 4.6/10

Value: 2.7

Growth: 4.6

Quality: 7.8

Yield: 3.1

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

Novo Nordisk

A-Score: 4.4/10

Value: 3.5

Growth: 8.8

Quality: 8.1

Yield: 5.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

Philips

A-Score: 3.8/10

Value: 2.4

Growth: 1.7

Quality: 2.9

Yield: 6.9

Momentum: 3.0

Volatility: 5.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.14%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.82%

Koninklijke Philips N.V. - NL0000009538

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PHIA

1.c. Company Highlights

Higher Yield

Cheaper

Lower Growth

Earnings Miss

Revenues Miss

Earnings Beats

Lower Quality

Strong Momentum

Revenues Beats

Stable Momentum

2. Philips' Strong 2025 Results Set Stage for Continued Growth in 2026

Segment Performance

Outlook for 2026

Valuation and Cash Flow

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.25%)

6. Segments

Diagnosis & Treatment Businesses

Expected Growth: 4.5%

Connected Care

Expected Growth: 6.0%

Personal Health Businesses

Expected Growth: 5.5%

Other

Expected Growth: 3.0%

Inter-Segment Eliminations

Expected Growth: 0.0%

7. Detailed Products

Philips TVs

Philips Healthcare Solutions

Philips Lighting

Philips Sonicare Toothbrushes

Philips Coffee Machines

Philips Air Purifiers

Philips Shavers

Philips Monitor

8. Koninklijke Philips N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Koninklijke Philips N.V. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.32$

Current Price

26.32$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA