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Avient (AVNT)
NYSE:AVNT
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Avient
(NYSE:AVNT)
61Neutral
Positive Factors
Margin Expansion
AVNT targets revenue growth 100-200bps above GDP and a significant EBITDA margin expansion from 16% to over 20%.
Organic Growth
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.
Stable 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.
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 Headwinds
FX headwinds are expected to be a $15MM headwind to EBITDA for the year.
Macroeconomic Backdrop
The updated forecast reflects expectations for a slower than previously expected macroeconomic backdrop in 2025.
Avient (AVNT) vs. S&P 500 (SPY)
Market Cap
$3.06B
Dividend Yield3.16%
Average Volume (3M)773.90K
Price to Earnings (P/E)18.1
Beta (1Y)1.48
Revenue Growth3.11%
EPS Growth123.46%
CountryUS
Employees9,200
SectorBasic Materials
Sector Strength59
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.84
Shares Outstanding91,532,650
10 Day Avg. Volume502,406
30 Day Avg. Volume773,902
Financial Highlights & Ratios
PEG Ratio0.15
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 Cap1.76
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit5.10
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$47.57Price Target Upside39.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Avient Business Overview & Revenue Model
Company DescriptionAvient Corporation provides specialized formulator, services, and sustainable material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates through three segments: Color, Additives and Inks; Specialty Engineered Materials; and Distribution. The Color, Additives and Inks segment offers specialized color and additive concentrates in solid and liquid form for thermoplastics; dispersions for thermosets; and specialty inks. This segment products are used in various markets include medical, pharmaceutical devices, food packaging, personal care, cosmetics, transportation, building products, recreational, athletic apparel, construction, filtration, outdoor furniture, healthcare, wire, and cable. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials; and long glass and carbon fiber technology to thermoset and thermoplastic composites. The Distribution segment distributes approximately 4,000 grades of engineering and commodity grade resins to custom injection molders and extruders. The company sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.
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
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.75
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Neutral
34.20
Price Trends
36.96
Negative
39.80
Negative
43.56
Negative
Market Momentum
-0.93
Negative
47.17
Neutral
73.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVNT, the sentiment is Neutral. The current price of 34.2 is above the 20-day moving average (MA) of 31.89, below the 50-day MA of 36.96, and below the 200-day MA of 43.56, indicating a neutral trend. The MACD of -0.93 indicates Negative momentum. The RSI at 47.17 is Neutral, neither overbought nor oversold. The STOCH value of 73.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.50B | 30.49 | 19.24% | 0.59% | 3.01% | 12.36% | |
77 Outperform | $3.98B | 31.05 | 11.87% | 1.77% | 6.30% | 41.01% | |
67 Neutral | $2.32B | 65.09 | 3.02% | 1.72% | -5.31% | -74.42% | |
65 Neutral | $2.94B | 27.36 | 6.35% | 1.68% | 0.99% | -27.62% | |
64 Neutral | $2.55B | 24.43 | 5.10% | 3.69% | -4.29% | -74.85% | |
61 Neutral | $3.06B | 18.14 | 7.32% | 3.16% | 3.11% | 123.46% | |
49 Neutral | $1.95B | -1.37 | -21.43% | 3.74% | 0.84% | -29.84% |
* Basic Materials Sector Average
Performance Comparison
AVNT
Avient
34.20
-8.92
-20.69%
FUL
H.B. Fuller Company
54.32
-21.59
-28.44%
HWKN
Hawkins
124.50
48.39
63.58%
IOSP
Innospec
92.24
-27.96
-23.26%
OLN
Olin
22.20
-30.31
-57.72%
SXT
Sensient Technologies
93.73
20.94
28.77%
Avient Earnings Call Summary
Earnings Call Date:Feb 13, 2025
(Q4-2024)
| % Change Since: -17.51%|
Next Earnings Date:May 06, 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.Q4-2024 Updates
Positive Updates
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.
Negative Updates
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.