Comparing Sotheby’s (BID) & Its Rivals

Sotheby’s (NYSE: BID) is one of 120 public companies in the “Business services, not elsewhere classified” industry, but how does it compare to its peers? We will compare Sotheby’s to similar companies based on the strength of its earnings, risk, valuation, analyst recommendations, profitability, institutional ownership and dividends.

Institutional & Insider Ownership

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90.1% of Sotheby’s shares are owned by institutional investors. Comparatively, 61.4% of shares of all “Business services, not elsewhere classified” companies are owned by institutional investors. 13.8% of Sotheby’s shares are owned by company insiders. Comparatively, 15.9% of shares of all “Business services, not elsewhere classified” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Sotheby’s and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sotheby’s 0 0 4 0 3.00
Sotheby’s Competitors 710 3581 6972 273 2.59

Sotheby’s presently has a consensus price target of $62.33, indicating a potential upside of 15.13%. As a group, “Business services, not elsewhere classified” companies have a potential upside of 2.81%. Given Sotheby’s’ stronger consensus rating and higher possible upside, equities analysts clearly believe Sotheby’s is more favorable than its peers.

Profitability

This table compares Sotheby’s and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sotheby’s 12.01% 22.31% 4.62%
Sotheby’s Competitors 5.39% -51.24% 2.19%

Valuation & Earnings

This table compares Sotheby’s and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Sotheby’s $989.39 million $118.79 million 24.06
Sotheby’s Competitors $2.38 billion $315.40 million 13.23

Sotheby’s’ peers have higher revenue and earnings than Sotheby’s. Sotheby’s is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

Sotheby’s has a beta of 1.77, indicating that its share price is 77% more volatile than the S&P 500. Comparatively, Sotheby’s’ peers have a beta of 0.66, indicating that their average share price is 34% less volatile than the S&P 500.

Summary

Sotheby’s beats its peers on 9 of the 13 factors compared.

Sotheby’s Company Profile

Sotheby's operates as an auctioneer of authenticated fine art, decorative art, jewelry, wine, and collectibles in the United States, the United Kingdom, Hong Kong, China, Switzerland, France, and internationally. The company operates in two segments, Agency and Finance. The Agency segment accepts property on consignment; and matches sellers to buyers through the auction or private sale process. It is also involved in the sale of artworks; and operation of an auction house for investment-quality automobiles. The Finance segment offers art-related financing services, such as term loans secured by artworks that are not intended for sale. The company is also involved in the retail wine operations; licensing Sotheby's International Realty and related trademarks; and licensing its Sotheby's brand name for use in connection with the art auction business in Australia, and art education services in the United States and the United Kingdom. Sotheby's was founded in 1744 and is headquartered in New York, New York.

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