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Element Solutions (ESI)
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Element Solutions (ESI) AI Stock Analysis

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ESI

Element Solutions

(NYSE:ESI)

Rating:74Outperform
Price Target:
$26.00
▲(10.31% Upside)
Element Solutions scores strongly due to its robust financial performance and positive earnings call guidance, signaling growth potential in core segments. Technical indicators and valuation are less favorable but not substantially detrimental. Positive corporate events further support a solid investment outlook.
Positive Factors
Earnings
ESI had a strong start to the year with earnings trending ahead of expectations.
Growth Potential
The company has strong and sustainable organic growth potential, particularly within the Electronics business.
Market Position
ESI's robust business model, rising exposure to high-growth semis markets, and solid balance sheet should help navigate an uncertain near/mid-term.
Negative Factors
Outlook
The outlook remains uncertain, driving forecasts slightly lower.
Price Target
The price target was lowered from $28 to $24, reflecting a more conservative outlook due to uncertainties in trade policies.

Element Solutions (ESI) vs. SPDR S&P 500 ETF (SPY)

Element Solutions Business Overview & Revenue Model

Company DescriptionElement Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies solder technologies, fluxes, cleaners, and other attachment materials for the electronics assembly industry; proprietary liquid chemical processes to manufacture printed circuit boards; and advanced copper interconnects, die attachment, wafer bump processes, and photomask technologies for integrated circuit fabrication and semiconductor packaging. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.
How the Company Makes MoneyElement Solutions Inc makes money primarily through the sale of specialty chemicals and materials that are used in critical manufacturing processes across multiple industries. The company generates revenue by supplying these high-performance products to manufacturers of electronics, industrial equipment, and consumer goods. ESI's key revenue streams include the Electronics segment, which provides interconnect materials and assembly solutions to the electronics industry, and the Industrial & Specialty segment, which offers surface treatment chemicals for industrial applications. Additionally, the company benefits from strategic partnerships and collaborations with leading manufacturers, which enhance its market reach and contribute to its earnings.

Element Solutions Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: 1.81%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong performance and growth in the electronics and power electronics segments. However, challenges such as declining electronics EBITDA margin, macroeconomic uncertainty, and weakness in consumer electronics and the European market were noted.
Q2-2025 Updates
Positive Updates
Record Performance in Electronics Business
The electronics business achieved a fifth consecutive quarter of high single-digit organic growth, with sales from wafer-level packaging products increasing by more than 20% in Q2.
Strong Performance in Power Electronics
The power electronics business experienced double-digit growth, driven by demand from legacy EV customers and new wins that have broadened the customer base.
Industrial & Specialty Segment Margin Improvement
Adjusted EBITDA growth for Industrial & Specialty, excluding graphics divestiture impact, was 10%. Core industrial surface treatment business demonstrated stable or growing adjusted EBITDA.
Adjusted EBITDA Exceeds Guidance
Adjusted EBITDA for the quarter was $136 million, surpassing the initial guidance range of $120 million to $125 million.
Strong Cash Flow and Balance Sheet Position
Generated $59 million in adjusted free cash flow, with net leverage ratio at the end of the quarter at 2.1x.
Negative Updates
Decline in Electronics EBITDA Margin
ESI's adjusted EBITDA margin declined roughly 40 basis points year-over-year in constant currency terms, impacted by higher pass-through metal prices.
Continued Macroeconomic Uncertainty
Global trade dynamics remain volatile, with a lack of clarity around tariff policy and its impact on demand.
Weakness in Consumer Electronics
The smartphone market remained mediocre, affecting the circuitry business, which historically had been concentrated in this market.
Challenges in European Market
Volumes for the core industrial business were down slightly due to macro weakness in Europe and the Americas, with no recovery seen in Europe yet.
Company Guidance
During the Element Solutions Q2 2025 earnings call, the company provided robust guidance for its future performance, highlighting several key metrics. The electronics business achieved a fifth consecutive quarter of high single-digit organic growth with wafer-level packaging products experiencing over 20% growth. The power electronics business also grew at a double-digit rate. Adjusted EBITDA for Q2 was $136 million, surpassing initial guidance of $120 million to $125 million, driven by organic sales growth of 6%. The company increased its full-year adjusted EBITDA outlook to a range of $530 million to $550 million, up from previous guidance. For Q3 2025, adjusted EBITDA is expected to be between $140 million and $145 million, projecting a 5% sequential improvement. The Industrial & Specialty segment saw adjusted EBITDA growth, excluding the graphics divestiture, of 10%. Element Solutions is optimistic about its ongoing growth, supported by investments in new technologies and facilities, such as the upcoming mid-scale active copper manufacturing site and research centers in India and Southeast Asia.

Element Solutions Financial Statement Overview

Summary
Element Solutions exhibits strong financial health with solid profitability margins and a stable balance sheet. While revenue growth is modest, the company maintains efficiency in operations and cash flow generation. The balance sheet is well-structured with moderate leverage, and the company effectively converts earnings into cash. Continued focus on revenue growth and cash flow expansion would further strengthen its financial position.
Income Statement
78
Positive
Element Solutions shows a strong gross profit margin of 42.1% and a net profit margin of 11.6% for TTM, indicating efficient cost management and profitability. The revenue growth rate is modest at 0.76% TTM, reflecting stable yet slow growth. EBIT and EBITDA margins are at 14.1% and 18.7% respectively, which are healthy for the specialty chemicals industry, suggesting robust operational efficiency.
Balance Sheet
72
Positive
The debt-to-equity ratio stands at 0.64, indicating a moderate level of leverage, which is generally manageable. Return on equity (ROE) is 11.4% TTM, showcasing reasonable profitability from shareholders' equity. The equity ratio is 52.6%, suggesting a solid capital structure with a good proportion of assets financed by equity.
Cash Flow
75
Positive
Operating cash flow to net income ratio is 1.16, highlighting strong cash generation from operations relative to accounting profits. The free cash flow to net income ratio is 0.95, reflecting effective cash conversion. However, free cash flow growth has been slightly negative, indicating challenges in growing free cash flow amidst capital expenditure.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.49B2.46B2.33B2.55B2.40B1.85B
Gross Profit1.04B1.04B918.50M952.70M960.80M786.00M
EBITDA369.50M501.60M345.10M496.10M475.50M305.70M
Net Income240.40M244.20M118.10M187.20M203.30M75.70M
Balance Sheet
Total Assets5.00B4.87B4.97B4.90B5.14B4.48B
Cash, Cash Equivalents and Short-Term Investments529.90M359.40M289.30M265.60M330.10M291.90M
Total Debt1.62B1.84B1.95B1.90B1.91B1.52B
Total Liabilities2.36B2.48B2.63B2.55B2.64B2.17B
Stockholders Equity2.63B2.38B2.33B2.33B2.48B2.32B
Cash Flow
Free Cash Flow270.60M293.60M280.90M253.50M279.70M232.50M
Operating Cash Flow334.20M362.00M333.60M301.30M326.00M261.30M
Investing Cash Flow-58.70M-73.80M-250.20M-75.20M-568.90M-39.90M
Financing Cash Flow-152.50M-206.60M-58.70M-275.60M290.00M-123.60M

Element Solutions Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price23.57
Price Trends
50DMA
22.93
Positive
100DMA
22.23
Positive
200DMA
24.27
Negative
Market Momentum
MACD
0.06
Positive
RSI
49.80
Neutral
STOCH
39.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESI, the sentiment is Neutral. The current price of 23.57 is below the 20-day moving average (MA) of 24.09, above the 50-day MA of 22.93, and below the 200-day MA of 24.27, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 49.80 is Neutral, neither overbought nor oversold. The STOCH value of 39.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ESI.

Element Solutions Risk Analysis

Element Solutions disclosed 33 risk factors in its most recent earnings report. Element Solutions 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

Element Solutions Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$5.08B35.8411.99%0.57%5.74%21.54%
74
Outperform
$5.69B23.809.62%1.38%5.41%23.44%
73
Outperform
$4.30B10.4729.03%2.42%-3.61%-9.70%
73
Outperform
$6.03B13.6722.09%-1.01%50.58%
70
Neutral
$3.13B26.465.09%3.16%3.28%1.69%
68
Neutral
$3.07B30.855.62%1.65%-0.09%-37.60%
44
Neutral
AU$1.46B-5.90-41.17%4.22%-3.35%-41.14%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ESI
Element Solutions
23.57
-1.09
-4.42%
BCPC
Balchem
156.42
-10.88
-6.50%
CBT
Cabot
80.10
-15.29
-16.03%
FUL
H.B. Fuller Company
56.81
-21.65
-27.59%
AVNT
Avient
34.18
-9.65
-22.02%
AXTA
Axalta Coating Systems
28.68
-5.19
-15.32%

Element Solutions Corporate Events

Business Operations and StrategyFinancial Disclosures
Element Solutions Revises 2025 Financial Outlook Upward
Positive
Jul 7, 2025

On July 7, 2025, Element Solutions Inc announced an upward revision of its second quarter and full year 2025 financial outlook. This announcement is expected to positively impact the company’s operations and market positioning, signaling potential growth and increased confidence among stakeholders.

The most recent analyst rating on (ESI) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Element Solutions stock, see the ESI Stock Forecast page.

Executive/Board ChangesShareholder MeetingsFinancial Disclosures
Element Solutions Holds Successful Annual Meeting
Positive
Jun 5, 2025

On June 3, 2025, Element Solutions Inc held its annual meeting where stockholders voted on several key proposals. All eight director nominees were elected, the executive compensation plan was approved, and PricewaterhouseCoopers LLP was ratified as the independent auditor for 2025. These decisions reflect strong shareholder support and are expected to influence the company’s governance and financial oversight positively.

The most recent analyst rating on (ESI) stock is a Buy with a $32.00 price target. To see the full list of analyst forecasts on Element Solutions stock, see the ESI Stock Forecast page.

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.Date of analysis: Aug 02, 2025