Arkema SA (ARKAY) AI Stock Analysis

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Arkema SA

(OTC:ARKAY)

Rating:71Outperform

Price Target:

$82.00

▲(7.88%Upside)

Arkema SA's stock is moderately attractive, with a solid valuation and positive signals from its earnings call, particularly strong growth in Asia and successful integration of acquisitions. However, financial performance shows declining profitability and cash flow issues, which are concerning. Technical indicators suggest short-term strength but long-term weaknesses that need addressing.

Arkema SA (ARKAY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.76B

Dividend Yield0.08%

Average Volume (3M)3.55K

Price to Earnings (P/E)16.8

Beta (1Y)0.78

Revenue Growth1.70%

EPS Growth-11.22%

CountryUS

Employees21,150

SectorBasic Materials

Sector Strength72

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)1.48

Shares Outstanding76,060,830

10 Day Avg. Volume9,829

30 Day Avg. Volume3,553

Financial Highlights & Ratios

PEG Ratio-1.97

Price to Book (P/B)0.65

Price to Sales (P/S)0.00

P/FCF Ratio18.51

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$75.00

Price Target Upside-1.33% Downside

Rating ConsensusHold

Number of Analyst Covering0

Arkema SA Business Overview & Revenue Model

Company DescriptionArkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide. The company operates through Adhesive Solutions, Advanced Materials, Coating Solutions, and Intermediates segments. It provides adhesive solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets. The company also offers advanced materials consisting of specialty polyamides and polyvinylidene fluoride; and performance additives, such as specialty surfactants and molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide for use in automotive and transportation, oil and gas, renewable energies, consumer goods, electronics, construction, coatings, animal nutrition, and water treatment sectors. In addition, it provides coating solutions comprising EU/US acrylics and coating resins; sartomer photocure resins and coatex rheology additives; decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbents, water treatment and oil and gas extraction, and 3D printing and electronics industries. Further, the company offers fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors. Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.

How the Company Makes MoneyArkema SA generates revenue through the production and sale of specialty chemicals and materials across its three business segments. The Adhesive Solutions segment provides high-performance bonding and sealing solutions, serving industries like construction and packaging. The Advanced Materials segment focuses on high-performance polymers and advanced materials for sectors including aerospace and electronics. The Coating Solutions segment offers products used in paints, coatings, and ink formulations, catering to the construction and packaging industries. The company benefits from significant partnerships and collaborations with major industry players, enhancing its market reach and technological capabilities. Additionally, Arkema invests heavily in research and development to innovate and create sustainable solutions, which is a key driver of its financial performance.

Arkema SA Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 7.24%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

Arkema's Q1 2025 earnings call highlighted strong growth in Asia and successful integration of acquisitions, while facing challenges with weak demand in Europe and the U.S., and significant declines in the Intermediates segment. The company remains optimistic about future growth through major projects and renewable energy initiatives.

Q1-2025 Updates

Positive Updates

Strong Performance in Asia

Asia demonstrated significant growth, particularly in high-performance polymers, with a 7% increase in EBITDA for Advanced Materials driven by the dynamic of new business developments in batteries, electronics, and sports.

Impressive Growth in PI Advanced Materials

PI Advanced Materials (PIAM) saw its EBITDA increase by more than 70% in Q1, supported by the rising demand for ultra-thin PI films for smartphones.

Successful Integration of Dow's Laminating Adhesives

Bostik benefited from the integration of Dow's laminating adhesives, starting well and contributing to sales with a positive scope effect of EUR 51 million.

Progress in Major Projects

Arkema is progressing with the ramp-up of the 1233zd unit in the U.S. and the greenfield polyamide 11 plant in Singapore, which is expected to exceed breakeven by summer.

Renewable Energy Initiatives

Arkema signed a long-term agreement with ENGIE for the supply of biomethane for Bostik in France, covering 85% of gas consumption from renewable sources.

Negative Updates

Weak Market Conditions in Europe and the U.S.

Demand was globally slow across most markets in Europe and the U.S. due to ongoing uncertainty around trade tariffs and a wait-and-see attitude from customers.

EBITDA Decline

Overall EBITDA was slightly down at EUR 329 million, a 6% decrease from last year, mainly due to significant decreases in the Intermediates segment.

Challenges in the Intermediates Segment

Intermediates, representing 7% of sales, saw a significant decrease due to weak refrigerant gases, with the segment's EBITDA down nearly 40% year-on-year.

Low Cycle Conditions in Coating Solutions

Coating Solutions experienced low cycle conditions in upstream acrylic, affecting segment performance with EBITDA at EUR 58 million.

High Working Capital Outflows

Q1 recurring cash flow was at minus EUR 138 million, attributed to working capital seasonality and a significant payout in the quarter.

Company Guidance

During the Q1 2025 results conference call, Arkema's CEO Thierry Le Hénaff provided guidance amidst a challenging macroeconomic environment characterized by volatility and uncertainty, particularly due to trade tariffs. The company reported an EBITDA of EUR 329 million, a slight 6% decline year-on-year, with Specialty Materials showing resilience despite a 3% decline. Advanced Materials saw a 7% EBITDA increase, driven by high-performance polymers and significant growth in Asia. Arkema aims to achieve an EBITDA at least equal to last year's and a recurring cash flow close to EUR 600 million for 2025. Key projects include the ramp-up of new production units, with expectations for significant contributions in the second half of the year. The company is also progressing with its greenfield polyamide 11 plant in Singapore and planning a new PVDF capacity in the U.S., projecting high returns with a USD 20 million investment. Arkema remains focused on cost control, operational efficiency, and leveraging its global industrial footprint to navigate the uncertainties of global trade dynamics.

Arkema SA Financial Statement Overview

Summary

Arkema SA demonstrates a mixed financial performance, with stable revenue but declining profitability margins and returns on equity. While debt levels are manageable, the decrease in free cash flow suggests potential liquidity pressures. The company needs to address operational efficiencies and cash flow management to sustain its financial health.

Income Statement

Positive

Arkema SA shows a stable income statement with a slight decline in total revenue from 2022 to 2024. The gross profit margin remained healthy, hovering around 20% over the years. However, net profit margin decreased from 11.3% in 2021 to 3.7% in 2024, indicating declining profitability. EBIT and EBITDA margins also showed a downward trend, reflecting challenges in maintaining operational efficiency.

Balance Sheet

Positive

The balance sheet reflects moderate stability with a reasonable debt-to-equity ratio, increasing from 0.52 in 2020 to 0.61 in 2024. The equity ratio improved, suggesting a stronger equity position over total assets. However, the return on equity dropped from 20.8% in 2021 to 4.7% in 2024, indicating diminished returns for shareholders.

Cash Flow

Positive

Arkema's cash flow statements reveal a challenging situation with free cash flow significantly decreasing from 2020 to 2024 due to higher capital expenditures. The operating cash flow to net income ratio remained stable, but the free cash flow to net income ratio has weakened, reflecting reduced cash generation capacity relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.58B	9.54B	9.51B	11.55B	9.52B	7.88B
Gross Profit	1.91B	1.94B	1.96B	2.58B	2.14B	1.55B
EBITDA	1.27B	1.31B	1.33B	1.97B	1.87B	1.22B
Net Income	324.00M	354.00M	418.00M	965.00M	1.31B	332.00M
Balance Sheet
Total Assets	14.30B	15.21B	14.52B	13.51B	12.30B	10.71B
Cash, Cash Equivalents and Short-Term Investments	1.12B	2.01B	2.04B	1.59B	2.29B	1.63B
Total Debt	0.00	4.55B	4.28B	3.26B	2.76B	2.80B
Total Liabilities	6.71B	7.45B	7.06B	6.17B	5.95B	5.48B
Stockholders Equity	7.37B	7.53B	7.20B	7.30B	6.30B	5.19B
Cash Flow
Free Cash Flow	270.00M	353.00M	593.00M	766.00M	152.00M	510.00M
Operating Cash Flow	1.06B	1.12B	1.27B	1.50B	915.00M	1.11B
Investing Cash Flow	-934.00M	-940.00M	-1.35B	-2.34B	473.00M	-458.00M
Financing Cash Flow	-1.33B	-207.00M	516.00M	168.00M	-652.00M	-535.00M

Arkema SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price76.01

Price Trends

50DMA

72.72

Positive

100DMA

73.65

Positive

200DMA

76.19

Negative

Market Momentum

MACD

0.83

Negative

RSI

57.09

Neutral

STOCH

96.97

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARKAY, the sentiment is Positive. The current price of 76.01 is above the 20-day moving average (MA) of 74.63, above the 50-day MA of 72.72, and below the 200-day MA of 76.19, indicating a neutral trend. The MACD of 0.83 indicates Negative momentum. The RSI at 57.09 is Neutral, neither overbought nor oversold. The STOCH value of 96.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARKAY.

Arkema SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPM	76 Outperform	$15.76B	22.94	25.42%	1.66%	0.51%	17.21%
AXTA	76 Outperform	$6.45B	14.46	23.59%	―	0.96%	82.78%
ARKAY	71 Outperform	$5.76B	16.85	4.87%	0.08%	1.70%	-11.22%
EMN	69 Neutral	$9.04B	9.97	16.16%	4.21%	2.78%	1.50%
PPG	64 Neutral	$26.32B	19.64	18.47%	2.35%	-7.67%	-0.58%
APD	63 Neutral	$66.59B	43.49	10.45%	2.38%	-1.09%	-37.71%
Sector *	63 Neutral	$10.53B	10.83	1.51%	2.68%	2.24%	-33.79%

* Basic Materials Sector Average

Performance Comparison

ARKAY

Arkema SA

76.01

-10.21

-11.84%

APD

Air Products and Chemicals

299.24

39.94

15.40%

EMN

Eastman Chemical

78.31

-19.35

-19.81%

PPG

PPG Industries

115.95

-8.87

-7.11%

RPM

RPM International

122.78

6.45

5.54%

AXTA

Axalta Coating Systems

29.53

-5.63

-16.01%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 22, 2025