Arkema SA (ARKAY) AI Stock Analysis

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Arkema SA

(OTC:ARKAY)

Rating:70Neutral

Price Target:

$80.00

▲(17.03% Upside)

Arkema's overall stock score reflects a balance of challenges and strengths. The financial performance is under pressure due to declining revenue and profitability margins, but the company maintains operational efficiency. Technical analysis shows a neutral trend with mild bullish momentum. Valuation is supported by a high dividend yield, although the P/E ratio suggests a premium. Earnings call insights reveal resilience in certain segments and effective cost management, but macroeconomic challenges remain significant.

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

Market Cap

$5.11B

Dividend Yield6.19%

Average Volume (3M)749.00

Price to Earnings (P/E)21.5

Beta (1Y)0.84

Revenue Growth0.85%

EPS Growth-36.94%

CountryUS

Employees21,150

SectorBasic Materials

Sector Strength66

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)1.78

Shares Outstanding76,060,830

10 Day Avg. Volume249

30 Day Avg. Volume749

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.95

Enterprise Value/Revenue1.06

Enterprise Value/Gross Profit5.56

Enterprise Value/Ebitda9.08

Forecast

1Y Price Target

$80.00

Price Target Upside17.03% Upside

Rating ConsensusHold

Number of Analyst Covering1

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 generates revenue primarily through the sale of its specialty chemicals and materials across various industries. The company has established key revenue streams through its three main segments, with High Performance Materials being the largest contributor, driven by demand for advanced polymers and composites. Industrial Specialties and Coating Solutions also play significant roles, with products that include adhesives, sealants, and specialty coatings. Additionally, Arkema engages in strategic partnerships and collaborations to enhance its product offerings and expand its market reach, which further contributes to its earnings. The company's focus on innovation allows it to command premium pricing for its specialized products, thereby increasing profitability.

Arkema SA Earnings Call Summary

Earnings Call Date:Jul 31, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Nov 07, 2025

Earnings Call Sentiment Neutral

The earnings call for Arkema's Q2 2025 highlights resilience in certain segments like Advanced Materials and effective cost-cutting measures. However, the company faces challenges in overall revenue decline, particularly in the Coating Solutions segment, and significant currency impacts. While there are promising developments in new projects and capacity expansions, geopolitical and economic uncertainties continue to pose risks.

Q2-2025 Updates

Positive Updates

Robust EBITDA Margin

Despite challenges, Arkema maintained a robust EBITDA margin of 15.2% for Q2 2025, showcasing the resilience of its portfolio.

Strong Performance in Advanced Materials

Advanced Materials segment saw a 6% increase in volumes with growth in most businesses, maintaining a margin close to 20%.

Cost-Cutting Measures and Cash Generation

Arkema implemented significant cost-cutting measures, generating a solid recurring cash flow of over EUR 110 million in Q2 2025.

Innovative Projects and Capacity Expansion

Arkema's major projects, like the new capacity for additives in the U.S. and the expansion of organic peroxide in China, are progressing well.

Negative Updates

Overall Revenue Decline

Q2 2025 sales were down 5.6% year-on-year, impacted by a negative 3.3% currency effect and a 1.3% decline in volumes.

Challenges in Coating Solutions

The Coating Solutions segment faced significantly lower performance compared to last year, affected by challenging unit margins in upstream acrylics.

Exchange Rate Impact

EBITDA was negatively impacted by unfavorable currency effects, estimated at EUR 50 million for the quarter.

Geopolitical and Economic Uncertainty

The macroeconomic environment remains challenging with low demand, geopolitical uncertainty, and limited visibility.

Company Guidance

During the conference call, Arkema provided guidance on its financial performance for the second half of 2025, amidst a challenging macroeconomic environment characterized by weak demand in the U.S. and Europe and unfavorable exchange rates. The company projected an EBITDA range of EUR 1.3 billion to EUR 1.4 billion for the year, factoring in a EUR 50 million FX headwind, and anticipated recurring cash flow between EUR 300 million and EUR 400 million. Despite a slight decline in volumes, Arkema reported a robust EBITDA margin of 15.2% in Q2, supported by resilient performance in its Adhesives and Advanced Materials segments. Cost-cutting measures are expected to achieve EUR 100 million in savings for the year, doubling the initial target. The net debt-to-EBITDA ratio was approximately 2.5x, with capital expenditures capped at EUR 650 million for 2025. Arkema emphasized its strategic focus on innovative materials and key growth markets, with significant projects expected to contribute over EUR 400 million to EBITDA by 2028.

Arkema SA Financial Statement Overview

Summary

Arkema SA faces challenges with declining revenue growth and profitability margins. The balance sheet remains stable with a reasonable debt level, but cash flow constraints could pose risks. The company needs to focus on improving revenue growth and managing costs to enhance profitability and cash flow generation.

Income Statement

Positive

Arkema SA's income statement shows a decline in revenue growth with a negative trend in the TTM period. The gross profit margin has slightly decreased over time, indicating pressure on cost management. Net profit margin has also decreased, reflecting challenges in maintaining profitability. However, the company maintains a stable EBIT and EBITDA margin, suggesting operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. The return on equity has decreased over the years, showing a decline in profitability relative to shareholder equity. However, the equity ratio remains strong, suggesting financial stability and a solid asset base.

Cash Flow

Neutral

Cash flow analysis reveals a decline in free cash flow growth, which could impact future investments and dividend payouts. The operating cash flow to net income ratio indicates that cash generation from operations is healthy, but the free cash flow to net income ratio has decreased, highlighting potential liquidity constraints.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.44B	9.54B	9.51B	11.55B	9.52B	7.88B
Gross Profit	1.80B	1.94B	1.96B	2.58B	2.14B	1.55B
EBITDA	1.10B	1.31B	1.33B	1.97B	1.87B	1.22B
Net Income	226.00M	354.00M	418.00M	965.00M	1.31B	332.00M
Balance Sheet
Total Assets	13.92B	15.21B	14.52B	13.51B	12.30B	10.71B
Cash, Cash Equivalents and Short-Term Investments	1.31B	2.01B	2.04B	1.59B	2.29B	1.63B
Total Debt	3.79B	4.55B	4.28B	3.26B	2.76B	2.80B
Total Liabilities	6.47B	7.45B	7.06B	6.17B	5.95B	5.48B
Stockholders Equity	7.23B	7.53B	7.20B	7.30B	6.30B	5.19B
Cash Flow
Free Cash Flow	222.00M	353.00M	593.00M	766.00M	152.00M	510.00M
Operating Cash Flow	1.02B	1.12B	1.27B	1.50B	915.00M	1.11B
Investing Cash Flow	-900.00M	-940.00M	-1.35B	-2.34B	473.00M	-458.00M
Financing Cash Flow	-964.00M	-207.00M	516.00M	168.00M	-652.00M	-535.00M

Arkema SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price68.36

Price Trends

50DMA

72.35

Negative

100DMA

71.85

Negative

200DMA

74.07

Negative

Market Momentum

MACD

-1.06

Positive

RSI

41.97

Neutral

STOCH

12.69

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARKAY, the sentiment is Negative. The current price of 68.36 is below the 20-day moving average (MA) of 71.16, below the 50-day MA of 72.35, and below the 200-day MA of 74.07, indicating a bearish trend. The MACD of -1.06 indicates Positive momentum. The RSI at 41.97 is Neutral, neither overbought nor oversold. The STOCH value of 12.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARKAY.

Arkema SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPM	78 Outperform	$16.24B	23.66	25.42%	1.59%	0.51%	17.21%
ARKAY	70 Neutral	$5.11B	21.52	3.48%	6.19%	0.85%	-36.94%
EMN	68 Neutral	$7.93B	9.70	14.52%	4.79%	1.60%	-3.97%
PPG	62 Neutral	$24.82B	19.50	16.88%	2.47%	-10.59%	-7.79%
Sector *	61 Neutral	$10.37B	6.45	-0.08%	2.84%	3.09%	-36.03%
LYB	57 Neutral	$17.72B	72.26	1.08%	9.92%	-14.12%	-89.22%
IFF	50 Neutral	$16.92B	83.39	-2.74%	2.42%	-0.07%	83.36%

* Basic Materials Sector Average

Performance Comparison

ARKAY

Arkema SA

68.36

-14.66

-17.66%

EMN

Eastman Chemical

68.90

-25.80

-27.24%

IFF

International Flavors & Fragrances

66.17

-34.71

-34.41%

LYB

LyondellBasell

54.63

-31.79

-36.79%

PPG

PPG Industries

111.53

-11.36

-9.24%

RPM

RPM International

128.09

11.01

9.40%

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: Aug 27, 2025