Ashland (ASH) AI Stock Analysis

• Market Cap: $2.32B
• Dividend Yield: 3.29%
• Average Volume (3M): 845.32K
• Price to Earnings (P/E): 21.0
• Beta (1Y): 0.97
• Revenue Growth: -4.35%
• EPS Growth: -115.63%
• Country: US
• Employees: 3,200
• Sector: Basic Materials
• Sector Strength: 57
• Industry: Chemicals - Specialty
• EPS (TTM): -0.56
• Shares Outstanding: 47,182,860
• 10 Day Avg. Volume: 792,447
• 30 Day Avg. Volume: 845,317
• PEG Ratio: 2.67
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.30
• Price to Cash Flow (P/CF): -22.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $75.29
• Price Target Upside: 54.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Ashland's overall score reflects financial challenges, bearish technical indicators, and unattractive valuation. Despite strategic initiatives and cost-saving efforts, sales declines and profitability issues weigh heavily. Some optimism exists from operational adjustments, but significant improvements are needed for a stronger outlook.

Positive Factors

Cash Flow

Ashland is likely to throw off between 7% and 8% of its share price in free cash flow for F2025 and F2026.

Investment Potential

The current share price represents a satisfactory entry point, making Ashland a more interesting longer-term investment.

Negative Factors

Life Sciences Performance

The segment disappointed with organic sales down 12%, including volume decline in pharma along with pricing pressures.

Market Concerns

Investors clearly remain concerned as seen by the stark stock correction.

Ashland Business Overview & Revenue Model

Company Description

Ashland Inc. provides additives and specialty ingredients worldwide. It operates through Life Sciences; Personal Care & Household; Specialty Additives; and Intermediates and Solvents segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. The Personal Care & Household segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. The Intermediates and Solvents segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. Ashland Inc. was founded in 1924 and is based in Wilmington, Delaware.

How the Company Makes Money

Ashland makes money through the production and sale of specialty chemicals and additives. The company's revenue model is primarily based on selling these high-performance materials to a diverse range of industries. Ashland generates revenue across several key segments, including Life Sciences, Personal Care, Specialty Additives, and Intermediates and Solvents. The company benefits from long-term partnerships and contracts with major industry players, allowing it to secure stable revenue streams. Additionally, Ashland invests in research and development to create innovative products that meet evolving customer needs, thereby maintaining competitive advantage and driving sales growth.

Ashland Financial Statement Overview

Summary

Ashland faces challenges in revenue and profitability, indicated by negative net income and EBIT in TTM. The balance sheet shows stability with moderate leverage, but the negative return on equity is a concern. Cash flow remains a bright spot with positive free cash flow, but overall financial performance needs improvement.

Income Statement

The company has experienced a decline in revenue over the past year, with TTM revenue at $2.05 billion, down from $2.11 billion the previous year. The gross profit margin has decreased, and the company reported a negative EBIT margin of -2.64% in TTM. Despite these challenges, EBITDA remains positive at 4.11%. Net profit margins have turned negative, indicating profitability challenges.

Balance Sheet

The balance sheet is relatively stable, with a decent equity ratio of 49.54% in TTM. The debt-to-equity ratio is manageable at 0.55, although it shows a slight increase over the years. However, the return on equity has turned negative due to the reported net loss, suggesting issues in generating returns for shareholders.

Cash Flow

The cash flow statement shows positive free cash flow in TTM, despite a decline from the previous year. The operating cash flow to net income ratio is strong, indicating effective cash generation relative to reported earnings. However, the free cash flow to net income ratio is skewed by negative net income.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
2.05B	2.11B	2.19B	2.39B	2.11B	2.33B
	Gross Profit
531.00M	618.00M	668.00M	830.00M	670.00M	707.00M
	EBIT
-54.00M	-26.00M	172.00M	246.00M	181.00M	662.00M
	EBITDA
110.00M	360.00M	517.00M	580.00M	503.00M	-202.00M
	Net Income Common Stockholders
-15.00M	169.00M	178.00M	181.00M	173.00M	-491.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
499.00M	300.00M	417.00M	646.00M	210.00M	454.00M
	Total Assets
9.24B	5.64B	5.94B	6.21B	6.61B	6.88B
	Total Debt
1.46B	1.47B	1.46B	1.38B	2.10B	2.00B
	Net Debt
964.00M	1.17B	1.04B	737.00M	1.89B	1.55B
	Total Liabilities
5.56B	2.78B	2.84B	2.99B	3.86B	3.84B
	Stockholders Equity
3.68B	2.87B	3.10B	3.22B	2.75B	3.04B
Cash Flow		Free Cash Flow
94.00M	325.00M	73.00M	-326.00M	455.00M	65.00M
	Operating Cash Flow
231.00M	462.00M	243.00M	-213.00M	560.00M	203.00M
	Investing Cash Flow
-26.00M	-102.00M	-109.00M	1.56B	-381.00M	8.00M
	Financing Cash Flow
-362.00M	-479.00M	-371.00M	-896.00M	-426.00M	9.00M

Ashland Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 48.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASH, the sentiment is Negative. The current price of 48.73 is below the 20-day moving average (MA) of 56.38, below the 50-day MA of 60.40, and below the 200-day MA of 77.26, indicating a bearish trend. The MACD of -0.92 indicates Negative momentum. The RSI at 43.68 is Neutral, neither overbought nor oversold. The STOCH value of 64.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ASH.

Ashland Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVNT	68 Neutral	$2.79B	16.52	7.32%	3.47%	3.11%	123.46%
KWR	68 Neutral	$1.87B	16.28	8.49%	1.77%	-5.82%	3.75%
IOSP	65 Neutral	$2.16B	60.56	3.02%	1.80%	-5.31%	-74.42%
FUL	61 Neutral	$2.86B	26.57	6.35%	1.69%	0.99%	-27.62%
ASH	57 Neutral	$2.32B	21.03	0.18%	3.29%	-4.35%	-115.63%
OLN	55 Neutral	$2.31B	22.12	5.10%	3.98%	-4.29%	-74.85%
Sector *	47 Neutral	$2.35B	-2.91	-21.55%	3.59%	4.17%	-28.20%

Ashland Corporate Events

Ashland Faces Sales Decline Amid Portfolio Changes

Ashland reported a challenging first quarter for fiscal year 2025, with sales down 14% compared to the previous year, primarily due to its portfolio optimization initiatives. These initiatives, which involved divesting certain product lines, reduced sales by about $50 million, impacting financial metrics like adjusted EBITDA and net income. The company also signed an agreement to sell its Avoca business and is executing a $30 million cost reduction plan to offset losses. Despite market challenges, Ashland is focused on advancing its global business lines and new technology platforms, while navigating economic uncertainties and trade policy changes under the new U.S. administration.

Ashland Stockholders Approve Key Proposals at Annual Meeting

At the annual meeting of stockholders of Ashland on January 21, 2025, 91.50% of shares were represented in person or by proxy, constituting a quorum. During the meeting, all nominees for the director positions were elected, Ernst & Young LLP was ratified as Ashland’s independent registered public accounting firm for fiscal 2025, and a non-binding advisory resolution on executive compensation was approved by the stockholders.