Koninklijke Philips NV (PHG)

Price$25.89Cached quoteAs of 2026-09-06 12:24 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because the recovery is promising but already partly reflected.

At roughly €23 billion of equity value, Philips trades around 26 times 2025 net income and about 25 times operating cash flow minus property spending. Philips’ broader free cash flow, meaning cash left after running and investing in the business, was only €512 million because 2025 included a €1.025 billion Respironics settlement payment. The 2026 free-cash-flow outlook is €1.5-€1.7 billion after a tariff refund, implying roughly 14-15 times guided cash flow. That is reasonable, but not a deep-value discount, given the recovery and remaining legal uncertainty.

Big picturePhilips has repaired profits, but revenue growth remains modest and cash history is uneven.

Revenue was €17.8 billion in 2025, barely above €17.3 billion in 2020, showing little long-term growth. Operating income improved to €1.42 billion from a €1.53 billion loss in 2022, while gross profit reached €8.06 billion. Operating cash flow recovered to €1.17 billion, but ranged from negative €173 million in 2022 to €2.14 billion in 2023. Large hospital orders can also shift between quarters. The bull case is sustained margin repair and sales growth; the bear case is renewed order weakness, China pressure, or new settlement cash needs.

Business strengthThe balance sheet is workable, while stronger margins and innovation are offset by debt and dilution.

At year-end 2025, Philips held €2.79 billion of cash against €8.09 billion of debt, leaving €5.29 billion of net debt; current assets exceeded current liabilities by about €2.42 billion. Gross margin rose to about 45% from roughly 41% in 2023, while research spending remained €1.7 billion. However, goodwill of €9.27 billion was large beside €10.96 billion of equity. The €0.85 dividend created 19.96 million new shares in 2026, while planned repurchases mainly cover employee incentive plans rather than permanently shrinking the share count.

What could change the storyConsistent order growth and cash delivery would unlock upside; China weakness or new liabilities would hurt.

Philips now guides to 3%-4.5% comparable sales growth and €1.5-€1.7 billion of 2026 free cash flow, but roughly €0.2 billion of the cash uplift reflects a U.S. tariff refund rather than recurring operations. The headline profit-margin range also rose by about one percentage point for the refund, leaving the underlying target unchanged. The current valuation needs delayed North American orders to close, margins excluding refunds to improve, and net debt to fall. China’s centralized hospital procurement or new Respironics-related cash payments would weaken that case.

AI: News

Q2 orders and China warningSales grew, but weak orders and tougher China conditions raised doubts about the turnaround.

On July 27-28, Philips reported 4% comparable sales growth, but comparable orders fell 1% as several large U.S. contracts slipped. China also moved public medical equipment buying toward centralized procurement, which management said could delay purchases and pressure pricing. The shares fell about 9% on July 28. That reaction cannot prove causation alone, but Reuters tied it to weaker orders and China concerns despite a higher 2026 margin and cash-flow outlook.

Q1 demand beatStronger orders, sales, and margins showed the recovery was broadening beyond cost cuts.

On May 6, Philips reported 6% comparable order growth, 4% comparable sales growth, and a 9.0% adjusted operating profit margin, a company measure excluding selected items, versus the 8.4% analyst expectation cited by Reuters. North America and Europe led demand, while productivity helped offset tariffs and inflation. The shares rose more than 5% in early trading. The result mattered because it supported the case that improving profitability was coming with better demand, not only from restructuring.

Turnaround targets resetPhilips set stronger profit and cash targets, convincing investors the recovery could extend.

On February 10, Philips reported 7% comparable fourth-quarter sales growth and a 15.1% adjusted operating profit margin, then set 2026 free cash flow at €1.3-€1.5 billion and targeted mid-teens adjusted margins by 2028. Reuters reported the shares jumped about 10%, the biggest one-day gain since July 2024, even though the 2026 sales-growth range was trimmed. The move showed investors were placing more weight on cash generation and margin recovery than on headline sales growth.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
Revenue	€17.83B	€18.02B	€18.17B	€17.83B	€17.16B	€17.31B	€17.15B	€18.12B	€17.78B	€17.42B	€16.81B
Gross profit	€8.06B	€7.77B	€7.45B	€7.19B	€7.17B	€7.82B	€7.90B	€8.55B	€8.18B	€7.94B	€7.21B
Gross margin	45.18%	43.13%	40.99%	40.35%	41.78%	45.17%	46.07%	47.20%	46.01%	45.57%	42.91%
Research & development	€1.70B	€1.75B	€1.89B	€2.09B	€1.81B	€1.82B	€1.79B	€1.76B	€1.76B	€1.67B	€1.56B
Operating expenses	€6.63B	€7.24B	€7.56B	€8.72B	€6.62B	€6.56B	€6.53B	€6.83B	€6.66B	€6.47B	€6.55B
Operating income	€1.42B	€529.0M	−€115.0M	−€1.53B	€553.0M	€1.26B	€1.37B	€1.72B	€1.52B	€1.46B	€658.0M
Operating margin	7.98%	2.94%	−0.63%	−8.58%	3.22%	7.30%	7.97%	9.49%	8.53%	8.40%	3.92%
EBITDA	€2.55B	€1.92B	€1.15B	€73.0M	€1.88B	€2.73B	€2.71B	€2.81B	€2.54B	€2.44B	€1.63B
EBITDA margin	14.29%	10.65%	6.31%	0.41%	10.93%	15.75%	15.80%	15.50%	14.30%	14.01%	9.70%
Net income	€897.0M	−€698.0M	−€463.0M	−€1.60B	€3.32B	€1.20B	€1.17B	€1.10B	€1.87B	€1.49B	€638.0M
Net profit margin	5.03%	−3.87%	−2.55%	−9.00%	19.37%	6.90%	6.84%	6.05%	10.52%	8.56%	3.80%
Basic EPSper basic share	€0.94	-€0.75	-€0.49	-€1.69	€3.52	€1.31	€1.27	€1.16	€1.78	€1.58	€0.68
Diluted EPSper diluted share	€0.93	-€0.75	-€0.49	-€1.69	€3.50	€1.29	€1.25	€1.14	€1.75	€1.56	€0.68

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Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of PHG
Holder	Shares held
Mondrian Investment Partners LTD	8.07M
DIMENSIONAL FUND ADVISORS LP	4.34M
FIDUCIARY MANAGEMENT INC /WI/	3.46M
CAUSEWAY CAPITAL MANAGEMENT LLC	3.06M
MORGAN STANLEY	2.94M
FMR LLC	2.65M
BRANDES INVESTMENT PARTNERS, LP	2.21M
NORTHERN TRUST CORP	2.09M
BlackRock, Inc.	2M
ENVESTNET ASSET MANAGEMENT INC	1.3M
UBS AM, a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC	944.31K
GOLDMAN SACHS GROUP INC	911.85K
INVESTMENT MANAGEMENT ASSOCIATES INC /ADV	859.38K
BECKER CAPITAL MANAGEMENT INC	858.79K
BANK OF AMERICA CORP /DE/	800.35K
UBS Group AG	686.08K
Quantinno Capital Management LP	575.65K
Connor, Clark & Lunn Investment Management Ltd.	563.72K
SEI INVESTMENTS CO	546.31K
ROYAL BANK OF CANADA	540.67K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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