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Ashland (ASH)
NYSE:ASH

Ashland (ASH) AI Stock Analysis

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AS

Ashland

(NYSE:ASH)

Rating:48Neutral
Price Target:
$49.00
â–Ľ(-0.20%Downside)
Ashland's overall stock score reflects substantial financial performance challenges, with pressures on revenue and profitability metrics, alongside a weak valuation profile. Although there are positive signs from operational improvements in certain segments, and strategic initiatives, these are offset by technical resistance and ongoing economic uncertainties.
Positive Factors
Innovation and Growth
Developing and scaling seven new platforms with formulations tuned to specific applications could add 3%-8% to organic growth over the next 10-15 years.
Market Positioning
Ashland trades at a discount compared to larger-cap consumer ingredient peers, and consistent growth along with margin expansion could add 2-3x to EV/EBITDA over the next cycle.
Strategic Initiatives
ASH plans to drive growth from rheology leadership to market transformation using innovation as the growth engine.
Negative Factors
Macroeconomic Challenges
ASH may face incrementally higher pressure from tariff/macroeconomic challenges compared to other names under coverage, compounded by unfavorable pricing.
Specialty Additives Performance
Specialty Additives volumes fell mainly due to lower coatings volumes and weakness in China, which more than offset recovery in North America and Europe.
Valuation Concerns
The valuation and price target have been reduced, indicating concerns over growth prospects and macroeconomic challenges.

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

Ashland Business Overview & Revenue Model

Company DescriptionAshland 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 MoneyAshland makes money through its diverse portfolio of high-performance chemical products and specialized solutions. The company's revenue model is primarily based on the sale of specialty additives, ingredients, and performance materials tailored to meet the specific needs of its clients in various industries. Key revenue streams include the life sciences sector, where Ashland provides pharmaceutical and nutraceutical solutions, and the personal care sector, where it supplies ingredients for cosmetics and skincare products. Additionally, Ashland earns from its specialty additives used in industrial applications, such as adhesives, coatings, and construction materials. The company leverages significant partnerships and collaborations with businesses across the globe to enhance its market reach and drive growth. Ashland's technical expertise, extensive research and development capabilities, and customer-focused innovations are crucial factors contributing to its earnings.

Ashland Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q2-2025)
|
% Change Since: -8.99%|
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 Financial Statement Overview

Summary
Ashland's financial performance is under pressure with declining revenues, negative profitability metrics, and weakening cash flow. The balance sheet is moderately stable but negative trends in income and cash flow suggest difficulties in maintaining growth and profitability.
Income Statement
45
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
55
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
40
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.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
1.95B2.11B2.19B2.39B2.11B2.02B
Gross Profit
610.00M618.00M668.00M830.00M670.00M599.00M
EBIT
-145.00M-26.00M172.00M333.00M192.00M-461.00M
EBITDA
42.00M360.00M457.00M580.00M448.00M-202.00M
Net Income Common Stockholders
-125.00M169.00M178.00M927.00M220.00M-508.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
168.00M300.00M417.00M646.00M210.00M454.00M
Total Assets
5.23B5.64B5.94B6.21B6.61B6.88B
Total Debt
1.49B1.47B1.46B1.38B2.10B1.99B
Net Debt
1.32B1.17B1.04B737.00M1.89B1.53B
Total Liabilities
2.67B2.78B2.84B2.99B3.86B3.84B
Stockholders Equity
2.56B2.87B3.10B3.22B2.75B3.04B
Cash FlowFree Cash Flow
43.00M325.00M73.00M-326.00M455.00M70.00M
Operating Cash Flow
165.00M462.00M243.00M-213.00M560.00M203.00M
Investing Cash Flow
-27.00M-102.00M-109.00M1.56B-381.00M8.00M
Financing Cash Flow
-411.00M-479.00M-371.00M-896.00M-426.00M9.00M

Ashland Technical Analysis

Technical Analysis Sentiment
Negative
Last Price49.10
Price Trends
50DMA
50.38
Negative
100DMA
55.36
Negative
200DMA
67.06
Negative
Market Momentum
MACD
-0.12
Positive
RSI
44.23
Neutral
STOCH
15.08
Positive
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 49.1 is below the 20-day moving average (MA) of 50.23, below the 50-day MA of 50.38, and below the 200-day MA of 67.06, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 44.23 is Neutral, neither overbought nor oversold. The STOCH value of 15.08 is Positive, 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 (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
KWKWR
71
Outperform
$2.06B22.066.78%1.67%-5.72%-19.82%
71
Outperform
$3.20B32.304.32%3.09%3.58%-5.17%
FUFUL
66
Neutral
$2.95B27.426.35%1.73%0.99%-27.62%
63
Neutral
$2.11B79.732.21%1.99%-7.91%-81.73%
OLOLN
61
Neutral
$2.34B40.002.94%3.94%-1.13%-81.74%
51
Neutral
$2.03B-1.27-21.09%4.14%2.90%-30.49%
ASASH
48
Neutral
$2.29B21.03-3.02%3.31%-7.63%-157.37%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ASH
Ashland
49.10
-46.13
-48.44%
FUL
H.B. Fuller Company
53.68
-24.10
-30.98%
IOSP
Innospec
83.18
-38.11
-31.42%
OLN
Olin
19.74
-28.45
-59.04%
AVNT
Avient
34.04
-8.61
-20.19%
KWR
Quaker Chemical
113.75
-54.17
-32.26%

Ashland Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Ashland Appoints New Interim CFO Amid Leadership Changes
Neutral
May 5, 2025

On May 1, 2025, Ashland Inc. announced the resignation of J. Kevin Willis from his roles as Senior Vice President, Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer, effective May 16, 2025, to pursue another opportunity. His departure was not due to any disagreements with the company. Subsequently, on May 5, 2025, the Board appointed William C. Whitaker as Interim Chief Financial Officer and Samuel A. Richardson as Vice President, Controller, and Principal Accounting Officer, both effective May 6, 2025. These appointments are part of Ashland’s strategic realignment in its financial leadership, with Whitaker and Richardson bringing extensive experience within the company to their new roles.

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.

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.