Positive Outlook for Tronox: Buy Rating Backed by TiO2 Price Increase and Cost-Saving Initiatives

J.P. Morgan analyst Jeffrey Zekauskas upgraded the rating on TRONOX (TROX – Research Report) to a Buy today, setting a price target of $7.00.

Jeffrey Zekauskas has given his Buy rating due to a combination of factors that suggest a positive outlook for Tronox. One of the key reasons is the anticipated increase in titanium dioxide (TiO2) prices, which are expected to rise in the second or third quarter of 2025 after a period of decline. This potential price increase, coupled with the implementation of tariffs on Chinese exports to markets like India and Brazil, could provide Tronox with opportunities to gain market share and improve its pricing power.
Additionally, Tronox is poised to benefit from several cost-saving initiatives totaling approximately $230 million. These initiatives include working through high-cost inventory, idling the Botlek plant, and implementing a cost improvement program aimed at reducing expenses by the end of 2026. These measures are expected to stabilize earnings and support the company’s ability to maintain its attractive dividend yield. Furthermore, the reduction in capital expenditures in the coming years is projected to enhance free cash flow, positioning Tronox to cover its dividend and potentially achieve earnings growth. These factors contribute to the positive assessment of Tronox’s stock potential.

According to TipRanks, Zekauskas is a 4-star analyst with an average return of 4.5% and a 56.15% success rate. Zekauskas covers the Basic Materials sector, focusing on stocks such as Mosaic Co, Ashland, and International Flavors & Fragrances.

In another report released on May 28, Barclays also maintained a Buy rating on the stock with a $8.00 price target.