Ashland (ASH) AI Stock Analysis

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Ashland

(NYSE:ASH)

44Neutral

Ashland faces significant financial challenges with declining revenue and profitability issues, despite a stable balance sheet. Technical indicators suggest a bearish trend, and valuation remains unattractive due to negative earnings. While some operational efficiencies are expected, current conditions warrant caution.

Positive Factors

Earnings and Margins

Ashland Global Holdings reported better-than-expected FY1Q25, as better margins in Life Sciences and Personal Care offset weaker revenues.

Investment Potential

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

Operational Strategy

Management has taken multiple steps to right-size its footprint/assets to better match the macro/demand environment.

Negative Factors

Macroeconomic Challenges

ASH may face incrementally higher pressure from tariff/macroeconomic challenges compared to other names under coverage, compounded by unfavorable pricing.

Sales and Volume Decline

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

Uncertainty in Life Sciences

ASH continues to see uncertainty around its core Life Sciences segment and the timing of overall organic recovery also remains unclear.

Ashland (ASH) vs. S&P 500 (SPY)

Market Cap

$2.31B

Dividend Yield3.3%

Average Volume (3M)778.63K

Price to Earnings (P/E)21.0

Beta (1Y)0.96

Revenue Growth-7.63%

EPS GrowthN/A

CountryUS

Employees3,200

SectorBasic Materials

Sector Strength59

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)-0.56

Shares Outstanding47,182,860

10 Day Avg. Volume615,944

30 Day Avg. Volume778,629

Financial Highlights & Ratios

PEG Ratio2.67

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.94

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit7.25

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$64.50

Price Target Upside30.49% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Ashland Business Overview & Revenue Model

Company DescriptionAshland Global Holdings Inc. is a global specialty materials company that operates in the chemical sector. The company focuses on providing innovative solutions across various industries, including personal care, pharmaceuticals, food and beverage, coatings, construction, and energy. Ashland is known for its specialty additives and functional ingredients that enhance the performance and sustainability of its customers' products.

How the Company Makes MoneyAshland 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's financial performance is under pressure with declining revenues, negative profitability metrics, and weakening cash flow generation. The balance sheet remains moderately stable with controlled leverage, but the negative trends in income and cash flow suggest difficulties in maintaining growth and profitability.

Income Statement

Neutral

Ashland's TTM financial performance shows a decline in total revenue with a significant negative net income, indicative of profitability challenges. The TTM gross profit margin is approximately 31.28%, which has decreased from previous years, reflecting reduced efficiency in managing production costs. EBIT and EBITDA margins are negative and low, respectively, impacting overall profitability. Revenue has been declining over the past few years, indicating potential demand issues or competitive pressures in the market.

Balance Sheet

Neutral

Ashland exhibits a relatively stable balance sheet with a debt-to-equity ratio of approximately 0.58, showing moderate leverage. However, the equity ratio is around 48.89%, indicating a balanced capital structure. Despite the declining stockholders' equity, the company's ability to manage its debt levels provides some stability. The return on equity has turned negative in the TTM, highlighting a decrease in shareholder value generation.

Cash Flow

Negative

The TTM cash flow analysis reveals a significant drop in operating cash flow compared to previous periods, affecting liquidity. Free cash flow has decreased considerably, impacting the company's ability to invest or return capital to shareholders. The operating cash flow to net income ratio is not meaningful due to a negative net income, suggesting operational cash generation issues. Overall, cash flow stability is a concern, demanding improved operational efficiency.

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

Ashland Technical Analysis

Technical Analysis Sentiment

Negative

Last Price49.43

Price Trends

50DMA

55.77

Negative

100DMA

62.53

Negative

200DMA

73.73

Negative

Market Momentum

MACD

-1.01

Negative

RSI

38.29

Neutral

STOCH

63.93

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 49.43 is below the 20-day moving average (MA) of 50.99, below the 50-day MA of 55.77, and below the 200-day MA of 73.73, indicating a bearish trend. The MACD of -1.01 indicates Negative momentum. The RSI at 38.29 is Neutral, neither overbought nor oversold. The STOCH value of 63.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ASH.

Ashland Risk Analysis

Ashland disclosed 18 risk factors in its most recent earnings report. Ashland reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ashland Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KWR	68 Neutral	$1.87B	16.29	8.49%	1.80%	-5.82%	3.75%
IOSP	67 Neutral	$2.32B	65.09	3.02%	1.72%	-5.31%	-74.42%
FUL	65 Neutral	$2.94B	27.36	6.35%	1.68%	0.99%	-27.62%
OLN	64 Neutral	$2.55B	24.43	5.10%	3.69%	-4.29%	-74.85%
AVNT	61 Neutral	$3.06B	18.14	7.32%	3.16%	3.11%	123.46%
Sector *	49 Neutral	$1.95B	-1.37	-21.43%	3.74%	0.84%	-29.84%
ASH	44 Neutral	$2.31B	21.03	-3.02%	3.30%	-7.63%	―

* Basic Materials Sector Average

Performance Comparison

ASH

Ashland

49.43

-45.95

-48.18%

FUL

H.B. Fuller Company

54.32

-23.09

-29.83%

IOSP

Innospec

92.24

-30.61

-24.92%

OLN

Olin

22.20

-31.34

-58.54%

AVNT

Avient

34.20

-9.20

-21.20%

KWR

Quaker Chemical

103.46

-79.22

-43.37%

Ashland Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q2-2025)

% Change Since: -9.12%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Neutral

The earnings call highlights strong performance in Life Sciences and Personal Care margins, and the completion of portfolio optimization. However, significant sales and revenue declines, particularly in the Intermediates segment, and the impact of global economic uncertainty balance out the positive aspects.

Q2-2025 Updates

Positive Updates

Strong Life Sciences and Personal Care Margins

Life Sciences adjusted EBITDA margin increased by 290 basis points year-over-year to 32.6%, and Personal Care delivered a record adjusted EBITDA margin of 30.1%, an increase of 350 basis points year-over-year.

Completion of Portfolio Optimization

The strategic portfolio realignment is complete, marked by the sale of the Avoca business and full identification of a $30 million cost reduction plan.

Significant Progress in Globalize and Innovate Initiatives

Investments in key assets and talent are leading to positive customer development and market penetration, particularly in China and Brazil.

Negative Updates

Sales and Revenue Decline

Q2 sales were $479 million, a 17% year-on-year decrease. Adjusted EBITDA was $108 million, down 14% year-over-year.

Challenges in Intermediates Segment

Intermediates sales were $37 million, down from $40 million the previous year, with adjusted EBITDA declining to $2 million from $12 million.

Impact of Global Economic Uncertainty

Increasing economic uncertainty and anticipated softer consumer demand prompted an adjustment to the fiscal year '25 outlook.

Company Guidance

During Ashland's earnings call for the second quarter of fiscal year 2025, the company provided updated financial guidance. Ashland now anticipates full-year sales in the range of $1.825 billion to $1.9 billion and adjusted EBITDA between $400 million and $420 million. The guidance adjustment reflects several factors, including a reduction in consumer sentiment, persistent challenges in the intermediates market, and softer-than-expected demand in European markets. Despite these challenges, Ashland is focusing on cost savings and productivity initiatives, expecting approximately $13 million in cost savings realization in the second half of fiscal year 2025. The company has also completed its strategic portfolio optimization and is accelerating its $60 million manufacturing optimization plan. Additionally, Ashland repurchased 1.5 million shares, a move reflecting its belief that the current share price undervalues its long-term growth potential.

Ashland Corporate Events

Business Operations and StrategyFinancial Disclosures

Ashland Reports Q2 2025 Sales Decline and Outlook Revision

Negative

Apr 30, 2025

Ashland Inc. reported its second-quarter fiscal 2025 results, showing a 17% decrease in sales to $479 million compared to the prior year, primarily due to its Portfolio Optimization initiatives. The company revised its full-year outlook, highlighting the impact of mixed demand environments and lower-than-expected sales volumes. Despite these challenges, Ashland is focusing on accelerating cost savings from its manufacturing optimization plans, with the Life Sciences and Personal Care business units achieving robust EBITDA margins above 30% this quarter. The company anticipates that its cost reduction and manufacturing optimization initiatives will continue to support results through the second half of the fiscal year and into fiscal 2026.

Spark’s Take on ASH Stock

According to Spark, TipRanks’ AI Analyst, ASH is a Neutral.

Ashland’s overall stock score reflects its financial challenges, including declining revenue and profitability issues, offset partially by stable cash flow. Technical indicators show downward momentum, while valuation remains pressured by negative earnings. The company’s strategic initiatives and cost-saving measures provide some hope for future improvement, but current conditions warrant caution.

To see Spark’s full report on ASH stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.