Avient (AVNT) AI Stock Analysis

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Avient

(NYSE:AVNT)

65Neutral

Avient exhibits strong financial performance with stable revenue growth and improving profit margins. The earnings call added positive sentiment with strategic initiatives and innovations. However, the stock's technical indicators suggest a bearish trend, and challenges from the halted ERP system and FX impacts slightly temper the outlook. Overall, Avient is in a solid position but faces some near-term hurdles.

Positive Factors

End-Markets

40% of Avient's sales are to stable end-markets such as packaging, healthcare, and defense, where demand likely trends higher with help from new products and market share gains.

Financial Performance

AVNT reported a slight EPS beat on 4% Y/Y organic sales growth, with full year and 1Q25 earnings guidance in line with expectations, despite the strong negative FX impact.

Strategic Plan

Avient Corporation has a strategic plan to achieve a 10%+ EPS compound annual growth rate, supported by sales growth above GDP and significant margin expansion.

Negative Factors

Cyclical End-Markets

60% of sales are to more cyclical end-markets such as auto, industrial, consumer, energy, and construction, where softer demand is expected to translate into a net volume decline this year.

Foreign Exchange

FX headwinds are expected to be a $15MM headwind to EBITDA for the year.

Macroeconomic Conditions

The updated forecast reflects expectations for a slower than previously expected macroeconomic backdrop in 2025.

Avient (AVNT) vs. S&P 500 (SPY)

Market Cap

$2.85B

Dividend Yield3.39%

Average Volume (3M)822.45K

Price to Earnings (P/E)16.9

Beta (1Y)1.49

Revenue Growth3.11%

EPS Growth123.46%

CountryUS

Employees9,200

SectorBasic Materials

Sector Strength58

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)1.84

Shares Outstanding91,532,650

10 Day Avg. Volume1,123,604

30 Day Avg. Volume822,446

Financial Highlights & Ratios

PEG Ratio0.14

Price to Book (P/B)N/A

Price to Sales (P/S)1.08

Price to Cash Flow (P/CF)7.20

P/FCF Ratio7.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$47.57

Price Target Upside52.81% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Avient Business Overview & Revenue Model

Company DescriptionAvient Corporation (AVNT) is a global provider of specialized and sustainable material solutions, primarily serving the plastics and polymer industries. The company operates in sectors including healthcare, packaging, consumer goods, and transportation, offering a broad range of products such as color and additive systems, specialty engineered materials, and thermoplastic resins. Avient is committed to innovation and sustainability, focusing on developing materials that improve performance while reducing environmental impact.

How the Company Makes MoneyAvient Corporation makes money through the manufacturing and sale of high-performance materials and solutions tailored to customer specifications across various industries. The company's primary revenue streams include sales of its color and additives products, specialty engineered materials, and distribution services. Avient benefits from its global reach, serving a diverse customer base that spans multiple sectors, which helps mitigate risks associated with reliance on a single market. Strategic partnerships and collaborations with industry leaders enable Avient to leverage cutting-edge technologies and enhance its product offerings, further driving revenue growth. Additionally, the company's focus on innovation and sustainability attracts customers seeking environmentally friendly solutions, contributing to its earnings.

Avient Financial Statement Overview

Summary

Avient shows solid financial performance with stable revenue growth, improving profit margins, and a strong balance sheet. The company's effective cost management and operational efficiency are reflected in its income and balance sheet scores. However, there is room for improvement in free cash flow growth.

Income Statement

Positive

Avient demonstrates stable revenue growth with a 3.11% increase from 2023 to 2024, indicating a positive growth trajectory. The gross profit margin improved to 32.60%, reflecting effective cost management. The net profit margin of 5.23% shows profitability, though there's room for enhancement. The EBIT margin increased to 10.16%, showing operational efficiency. Overall, the income statement indicates a robust performance with potential for further profit margin improvements.

Balance Sheet

Positive

The company's debt-to-equity ratio of 0.89 reflects moderate leverage, which is manageable but should be monitored. Avient's return on equity improved to 7.27%, indicating efficient equity usage to generate profits. The equity ratio of 40.08% shows a strong equity base. While the balance sheet is stable, maintaining or improving equity levels could bolster financial strength.

Cash Flow

Positive

Operating cash flow improved, showing a 27.38% increase, highlighting better cash generation from operations. The free cash flow to net income ratio of 0.80 suggests a strong capacity to convert income into cash flow, though there is scope to enhance free cash flow growth. Overall, cash flow is solid but could benefit from further growth in free cash flow.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.24B	3.14B	3.40B	4.82B	3.24B
	Gross Profit
1.06B	902.70M	882.70M	1.10B	784.30M
	EBIT
329.30M	221.50M	183.60M	381.20M	189.30M
	EBITDA
329.30M	391.40M	427.20M	472.90M	352.90M
	Net Income Common Stockholders
169.50M	75.70M	83.10M	230.80M	131.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
544.50M	545.80M	641.10M	601.20M	649.50M
	Total Assets
5.81B	5.97B	6.08B	5.00B	4.87B
	Total Debt
2.07B	2.14B	2.24B	1.93B	1.95B
	Net Debt
1.52B	1.59B	1.60B	1.33B	1.30B
	Total Liabilities
3.48B	3.63B	3.73B	3.21B	3.17B
	Stockholders Equity
2.33B	2.32B	2.33B	1.77B	1.68B
Cash Flow		Free Cash Flow
134.90M	82.20M	292.90M	133.20M	157.90M
	Operating Cash Flow
256.80M	201.60M	398.40M	233.80M	221.60M
	Investing Cash Flow
-120.60M	-94.20M	-504.00M	-150.20M	-1.43B
	Financing Cash Flow
-120.90M	-201.70M	166.40M	-114.60M	982.00M

Avient Technical Analysis

Technical Analysis Sentiment

Negative

Last Price31.13

Price Trends

50DMA

39.58

Negative

100DMA

42.17

Negative

200DMA

44.19

Negative

Market Momentum

MACD

-1.15

Positive

RSI

32.64

Neutral

STOCH

16.88

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVNT, the sentiment is Negative. The current price of 31.13 is below the 20-day moving average (MA) of 36.05, below the 50-day MA of 39.58, and below the 200-day MA of 44.19, indicating a bearish trend. The MACD of -1.15 indicates Positive momentum. The RSI at 32.64 is Neutral, neither overbought nor oversold. The STOCH value of 16.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVNT.

Avient Risk Analysis

Avient disclosed 13 risk factors in its most recent earnings report. Avient reported the most risks in the “Finance & Corporate” category.

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

Latest Risks Added 0 New Risks

Avient Peers Comparison

Overall Rating

UnderperformOutperform

Sector (47)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SXT	73 Outperform	$3.15B	25.20	11.79%	2.21%	6.92%	33.08%
HWKN	71 Outperform	$2.40B	29.30	19.24%	0.61%	3.01%	12.36%
AVNT	65 Neutral	$2.85B	16.90	7.32%	3.39%	3.11%	123.46%
IOSP	65 Neutral	$2.20B	61.72	3.02%	1.77%	-5.31%	-74.42%
FUL	61 Neutral	$2.91B	27.06	6.35%	1.66%	0.99%	-27.62%
OLN	58 Neutral	$2.35B	22.48	5.10%	3.91%	-4.29%	-74.85%
Sector *	47 Neutral	$2.49B	-2.97	-22.82%	3.51%	4.13%	-28.53%

* Basic Materials Sector Average

Performance Comparison

AVNT

Avient

31.13

-9.78

-23.91%

FUL

H.B. Fuller Company

53.73

-21.27

-28.36%

HWKN

Hawkins

114.78

38.18

49.84%

IOSP

Innospec

87.47

-32.81

-27.28%

OLN

Olin

20.43

-32.44

-61.36%

SXT

Sensient Technologies

74.11

6.55

9.70%

Avient Earnings Call Summary

Earnings Call Date: Feb 13, 2025 | % Change Since: -24.92% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of achievements and challenges. Avient successfully delivered organic revenue growth and margin expansion, launched significant innovations, and maintained a strong safety record. However, the discontinuation of the ERP project and the negative impacts from currency fluctuations and variable compensation posed challenges. The new healthcare and defense innovations provide promising growth opportunities, but the significant ERP-related charges and FX headwinds weigh on the outlook.

Highlights

Organic Revenue Growth and Margin Expansion

Avient achieved 4% organic revenue growth for the full year 2024, with both business segments (CAI and SEM) experiencing growth and margin expansion. Adjusted EBITDA margins expanded by 20 basis points to 16.2%.

New Innovation in Dyneema Portfolio

Avient launched a third-generation technology of Dyneema, offering unmatched ballistic protection and thermal performance. This innovation is up to 45% lighter for law enforcement and introduces new applications for military personnel.

Record Safety Performance

2024 was a record year for safety at Avient, with the lowest injury incident rate in the company's history.

Dividend Increase

Avient increased its dividend by 5%, marking the 14th consecutive year of annual dividend growth.

Strong Healthcare Segment Performance

Healthcare applications saw double-digit growth in 2024, driven by new business in remote monitoring devices and continuous glucose monitoring devices.

Lowlights

ERP System Implementation Halted

Avient decided to cease work on the S/4HANA ERP system due to increased complexity, cost, and risk. This decision resulted in a noncash impairment charge of approximately $71 million.

Impact of Foreign Exchange

The strengthening U.S. dollar negatively affected fourth-quarter EBITDA by $2 million and EPS by $0.01. For 2025, there is a forecasted $0.12 EPS headwind due to FX.

Variable Compensation Impact

Variable compensation accruals negatively impacted fourth-quarter adjusted EBITDA by $10 million and EPS by $0.08.

Company Guidance

During Avient Corporation's 2024 fourth-quarter earnings call, the company highlighted several key financial metrics and strategic initiatives. Organic sales for the year increased by 4%, with the Color, Additives, and Inks (CAI) segment growing by 3% and the Specialty Engineered Materials (SEM) segment by 6%. Both segments also experienced adjusted EBITDA margin expansions, with CAI increasing by 90 basis points and SEM by 110 basis points. Overall adjusted EBITDA margins for the company expanded by 20 basis points to 16.2%, and adjusted EPS grew by 13%, factoring in foreign exchange impacts. Avient announced a 5% dividend increase, marking the 14th consecutive year of dividend growth. For 2025, the company projected adjusted EBITDA between $540 million and $570 million and adjusted EPS ranging from $2.70 to $2.94, anticipating an 11% growth excluding foreign exchange impacts. The call also emphasized Avient's new strategic focus on innovation and sustainability, including the launch of the Dyneema-HB330 and Dyneema-HB332 products for defense applications, which offer superior ballistic protection. Additionally, the company made a significant decision to halt the implementation of the S/4HANA ERP system, resulting in a noncash impairment charge of approximately $71 million, favoring alternative solutions to achieve similar benefits at lower costs.

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.