In a report released today, Vincent Andrews from Morgan Stanley maintained a Hold rating on TRONOX (TROX – Research Report), with a price target of $8.00.
Vincent Andrews has given his Hold rating due to a combination of factors impacting Tronox’s financial outlook. The decision follows a reduction in the company’s estimated earnings and price target, which was adjusted from $12 to $8 after the 1Q25 results. The revised EBITDA forecast is approximately 10% lower than previous estimates, and the assumed valuation multiple has been decreased from 8.5x to 7.5x, reflecting a cautious stance on the company’s future performance.
The Hold rating is further influenced by the perception of greater downside risks compared to potential upsides. Andrews expresses skepticism about the impact of anti-dumping duties on the TiO2 market and anticipates weaker volume trends than Tronox’s expectations. Additionally, the market’s weak demand, tariff risks, and increased Chinese capacity contribute to a lack of anticipated upcycle. Despite the stock’s significant sell-off, the ongoing challenging market conditions and high debt levels pose a considerable risk, making the potential upside insufficient to outweigh the bear case scenario.
Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TROX in relation to earlier this year.