Ercros SA (ECR) AI Stock Analysis

• Market Cap: €257.39M
• Dividend Yield: 2.76%
• Average Volume (3M): 76.59K
• Price to Earnings (P/E): 23.9
• Beta (1Y): 0.24
• Revenue Growth: -0.39%
• EPS Growth: -440.04%
• Country: ES
• Employees: 1,318
• Sector: Basic Materials
• Sector Strength: 65
• Industry: Chemicals
• EPS (TTM): -0.32
• Shares Outstanding: 91,436,195
• 10 Day Avg. Volume: 89,079
• 30 Day Avg. Volume: 76,589
• PEG Ratio: 0.19
• Price to Book (P/B): 0.95
• Price to Sales (P/S): 0.48
• P/FCF Ratio: -79.81
• 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: €2.50
• Price Target Upside: -10.71% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 44 Neutral
• Price Target: €2.50 ▼(-10.71% Downside)

Ercros SA's overall stock score is primarily impacted by its weak financial performance and bearish technical indicators. The company's negative profitability and cash flow issues are significant concerns, while the technical analysis suggests continued downward pressure on the stock price. Valuation metrics provide a mixed view, with a negative P/E ratio and moderate dividend yield.

Ercros SA Business Overview & Revenue Model

Company Description

Ercros, S.A. manufactures and sells basic chemicals, intermediate chemicals, and pharmaceuticals in Spain. It operates through three segments: Chlorine Derivatives, Intermediate Chemicals, and Pharmacy. The Chlorine Derivatives segment produces ammonia, bioplastics, caustic potash and soda, chlorine, chloroisocyanurates, dicalcium phosphate, dichloroethane, hydrochloric acid, hydrogen peroxide, potassium carbonate, PVC compounds, sodium chlorate and chlorite, sodium hypochlorite, and vinyl chloride monomers. This segment's products are used as intermediates in other industrial processes to purify and treat drinking and waste water; treat and maintain swimming pool water; bleach fabrics and paper; produce solvents, detergents, and strippers; manufacture printing inks and coloring; to produce compound feed and in cooling equipment. The Intermediate Chemicals segment provides formaldehyde, glues and resins, molding powders, paraformaldehyde, pentaerythritol and dipentaerythritol, and sodium formate for manufacturing chipboards, and decorative laminates and plywoods, as well as resins, paints, and varnishes in the furniture and decoration industry; plugs and switches in the electrical components sector; and household, sanitary, and packaging materials in the textile tanning industry. The Pharmacy division engages in the production of raw materials and intermediate products from antibiotic, cholesterol-lowering, anti-ulcer, and anti-fungal agents. This segment's products include amlodipine besylate, azithromycin, clarithromycin, erythromycins, famotidine, calcium and sodium fosfomycin, fosfomycin trometamol, and fusidic acid. The company is also involved in exporting activities. Ercros, S.A. was founded in 1817 and is headquartered in Barcelona, Spain.

How the Company Makes Money

Ercros generates revenue through the sale of its chemical products, pharmaceuticals, and plastics. The Chemicals division is a major revenue driver, leveraging the production of essential chemical compounds that are in demand in various industries. The Pharmaceuticals division contributes by supplying active ingredients to the pharmaceutical sector, which is characterized by long-term contracts and stable demand. Additionally, the Plastics division benefits from the demand for PVC and other plastic products in construction and manufacturing. Ercros also engages in strategic partnerships and collaborations with other companies to enhance its product offerings and expand its market reach, further contributing to its revenue streams.

Ercros SA Financial Statement Overview

Summary

Ercros SA faces significant financial challenges, marked by declining revenues, negative profitability, and weakened cash flow. The income statement shows an 8% drop in revenue and negative net income. The balance sheet reflects moderate stability but increased leverage concerns. The cash flow statement indicates severe liquidity issues with zero operating cash flow and negative free cash flow, exacerbating financial strain.

Income Statement

Ercros SA's income statement shows declining revenues and profitability. Revenue dropped by 8% from the previous year, and the company reported a negative EBIT and net income, indicating operational and financial challenges. Margins have significantly deteriorated, with a gross profit margin of approximately 33.7% but a concerning negative net profit margin. The declining revenue growth and negative profitability highlight potential issues in the company's core operations, affecting its ability to generate consistent profit.

Balance Sheet

The balance sheet reflects moderate financial stability with an equity ratio of 48.8%, indicating a balanced approach between equity and liabilities. However, the debt-to-equity ratio increased to 0.51, which suggests potential leverage concerns. The return on equity is negative due to net losses, which raises concerns regarding shareholders' returns. While the company maintains a reasonable asset base, the increased leverage and negative return may limit future financial flexibility.

Cash Flow

Ercros SA's cash flow statement shows a significant decline in cash generation, with operating cash flow dropping to zero. The free cash flow has turned negative, reflecting difficulties in covering capital expenditures. The absence of operating cash flow to net income and free cash flow to net income ratios further illustrates challenges in converting revenues into cash, which could constrain the company's investment and debt servicing abilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	499.29M	667.41M	725.29M	998.53M	772.32M	568.80M
Gross Profit	133.98M	200.63M	230.62M	305.94M	246.80M	220.46M
EBITDA	-6.40M	25.91M	43.27M	121.71M	90.85M	42.11M
Net Income	-33.13M	-11.66M	27.59M	62.99M	43.30M	6.26M
Balance Sheet
Total Assets	740.17M	699.19M	683.32M	746.55M	709.96M	590.22M
Cash, Cash Equivalents and Short-Term Investments	86.12M	31.49M	39.15M	55.48M	50.30M	38.25M
Total Debt	232.26M	172.34M	131.25M	135.43M	120.00M	131.41M
Total Liabilities	428.61M	358.03M	320.20M	385.84M	378.34M	306.00M
Stockholders Equity	311.56M	341.16M	363.12M	360.71M	331.61M	284.21M
Cash Flow
Free Cash Flow	-8.60M	-4.04M	17.30M	35.80M	47.42M	63.46M
Operating Cash Flow	16.31M	9.51M	51.14M	62.99M	60.32M	74.59M
Investing Cash Flow	-24.91M	-26.67M	-33.84M	-52.81M	-34.24M	-34.01M
Financing Cash Flow	51.35M	14.33M	-35.91M	-21.45M	-14.68M	-61.27M

Ercros SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:ECR, the sentiment is Negative. The current price of 2.8 is below the 20-day moving average (MA) of 2.89, below the 50-day MA of 2.97, and below the 200-day MA of 3.15, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 41.41 is Neutral, neither overbought nor oversold. The STOCH value of 33.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:ECR.

Ercros SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$10.31B	6.18	0.76%	2.94%	3.30%	-36.34%
ECR	44 Neutral	€257.39M	23.88	-12.69%	2.76%	-0.39%	-440.04%
0OIQ	―	€2.55B	29.20	3.97%	―	―	―

Ercros SA Corporate Events

Ercros Board Warns Against Dividend Proposal

The board of directors of Ercros SA has issued a warning against a shareholder proposal to distribute dividends, highlighting that such a move would breach existing financing contracts. This breach could lead to the early maturity of these contracts and potentially jeopardize the company’s financial stability, prompting the board to recommend voting against the dividend distribution proposal.

Ercros Board Advises Against Dividend Distribution Amid Financial Challenges

Ercros SA’s board of directors has recommended voting against a proposal to distribute dividends from voluntary reserves due to recent financial losses and the need to preserve resources for long-term strategic goals. Approving the dividend distribution could breach financing agreements, potentially leading to financial instability for the company.

Ercros SA Announces Dividend Proposal for Shareholders’ Meeting

Ercros SA has announced a supplement to the agenda for its upcoming ordinary general shareholders’ meeting, scheduled for June 26, 2025. The new agenda includes a proposal for the distribution of a dividend charged to reserves at a rate of 0.096 euros gross per share, which could impact shareholder returns and company financials.

Ercros Board Advises Against Dividend Distribution Amid Financial Strains

Ercros SA’s board of directors has recommended voting against a shareholder proposal to distribute dividends from voluntary reserves due to the company’s current financial challenges and the broader economic context affecting the European chemical sector. The board emphasizes the need for prudence in managing the company’s equity to support its strategic initiatives and maintain competitive positioning amid high energy costs and market pressures.

Ercros Announces General Shareholders’ Meeting for June 2025

Ercros SA has scheduled its general shareholders’ meeting for June 27, 2025, in Barcelona, with an option for telematic participation. The agenda includes standard approvals, re-election of an independent director, and examination of shareholder and directors’ remuneration policies, considering recent takeover bids.

Ercros S.A. Announces General Shareholders’ Meeting with Key Agenda Items

Ercros, S.A. has announced its upcoming ordinary general shareholders’ meeting scheduled for June 26, 2025, with a second call on June 27 if necessary. The meeting will address key agenda items including the approval of annual accounts, a corporate sustainability report, and the shareholder remuneration policy. Shareholders have the option to attend physically or telematically and are entitled to an attendance bonus. The meeting is significant for stakeholders as it will review important financial and governance policies, impacting the company’s strategic direction and shareholder engagement.

Ercros Faces Q1 Losses Amidst Market Challenges

Ercros SA reported a loss of 12 million euros in the first quarter of 2025, attributed to weak demand, high energy costs, and intense international competition. Despite these challenges, Ercros maintains a strong financial position with 92 million euros in liquidity and continues to execute its strategic 3D Plan to improve operations and market positioning amidst ongoing takeover bids and a predicted gradual recovery in the European chemical industry.