Element Solutions (ESI)
NYSE:ESI
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Element Solutions
(NYSE:ESI)
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Rating:70Outperform
Price Target:
$36.00
▲(6.07% Upside)
Action:ReiteratedDate:02/18/26
The score is driven primarily by solid overall financial performance (strong gross margins and improving leverage) and supportive technical strength. These are partially offset by a premium valuation (high P/E, modest yield) and near-term margin/cash-flow variability risks flagged around metal-price volatility and post-acquisition leverage.
Positive Factors
Strong gross margin profile
A ~42% gross margin provides durable structural profitability driven by proprietary specialty formulations and technical service. High gross margin supports reinvestment in R&D, capacity expansion and cushions operating leverage, underpinning long-term cash generation and resilience.
Negative Factors
Metal-price volatility and working-capital swings
Pass-through metals create structural exposure to commodity swings that compress margins and create working-capital timing variability. Persistent metal-price volatility can depress reported margins and strain cash conversion, adding recurring seasonality and operational risk to fundamentals.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong gross margin profile
A ~42% gross margin provides durable structural profitability driven by proprietary specialty formulations and technical service. High gross margin supports reinvestment in R&D, capacity expansion and cushions operating leverage, underpinning long-term cash generation and resilience.
Read all positive factors
Element Solutions (ESI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.27B
Dividend Yield1.25%
Average Volume (3M)3.14M
Price to Earnings (P/E)31.7
Beta (1Y)1.24
Revenue Growth3.87%
EPS Growth-10.30%
CountryUS
Employees5,300
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.37
Shares Outstanding243,578,410
10 Day Avg. Volume2,847,756
30 Day Avg. Volume3,136,658
Financial Highlights & Ratios
PEG Ratio-1.46
Price to Book (P/B)2.26
Price to Sales (P/S)2.37
P/FCF Ratio26.57
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue3.70
Enterprise Value/Gross Profit8.81
Enterprise Value/Ebitda20.33
Forecast
1Y Price Target
$38.22Price Target Upside12.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1.75
Revenue Forecast (FY)$3.06B
Element Solutions Business Overview & Revenue Model
Company Description
Element 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 se...
How the Company Makes Money
Element Solutions generates revenue primarily through the sale of its specialty chemical products across multiple sectors. The company operates through two main segments: Electronics and Industrial. In the Electronics segment, ESI provides materia...
Element Solutions Key Performance Indicators (KPIs)
Element Solutions Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook: management reported record adjusted EBITDA and EPS, strong Electronics momentum driven by AI/data-center demand, meaningful product and M&A progress (Micromax, EFC, Kuprion) and solid cash generation. Notable near-term headwinds include metal price volatility that pressured margins and working capital, softness in some industrial end markets, and a temporary rise in leverage following acquisitions. Management provided constructive 2026 guidance and plans to recapture timing-related metal losses and to reduce leverage over the year.Positive Updates
Record Financial Performance in 2025
Delivered record adjusted EBITDA of $548 million for the year and record adjusted EPS of $1.49 despite the Graphics divestiture.
Negative Updates
Metal Price Volatility Impact
Rapid increases in tin and silver prices in Q4 caused several million dollars of P&L hit, an optical ~1% margin headwind in Assembly due to pass-through metals, higher working capital ties and increased hedge settlement timing variability; Q1 guidance range widened because of this volatility.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Financial Performance in 2025
Delivered record adjusted EBITDA of $548 million for the year and record adjusted EPS of $1.49 despite the Graphics divestiture.
Read all positive updates
Company Guidance
Management guided 2026 adjusted EBITDA of $650–$670 million (inclusive of the Micromax and EFC acquisitions and assuming current FX rates and metal prices), which they say implies high‑single‑digit organic adjusted EBITDA growth after an expected $5 million headwind from lapping the 2025 Graphics stub and a modest FX tailwind; they also expect adjusted EPS to grow in the mid‑to‑high teens. 2026 capital expenditures are expected to be approximately $75 million (including the newly acquired businesses), pro forma leverage sits slightly above 3.0x after the ~ $870 million of acquisition consideration (partly funded with a $450 million term‑loan add‑on) and is expected to approach ~2.5x by year‑end 2026 assuming no further capital allocation, while debt is ~95% fixed at a ~4% cost. Management flagged metal‑price volatility as a driver of Q1 seasonality and a wider quarterly range, reiterated normal incremental margins of ~30–40%, targets roughly 50% EBITDA‑to‑free‑cash‑flow conversion (perhaps a tick lower given metal timing), and noted Kuprion should contribute multiple millions of revenue in 2026 with a material EBITDA contribution in 2027 (anchored to 2025 results of $548M adjusted EBITDA, $1.49 adjusted EPS, $2.6B net sales, $256M adjusted free cash flow and $627M cash).Element Solutions Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
72
Positive
Cash Flow
67
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.55B | 2.46B | 2.33B | 2.55B | 2.40B |
| Gross Profit | 1.07B | 1.04B | 918.50M | 952.70M | 960.80M |
| EBITDA | 493.40M | 501.60M | 345.10M | 496.10M | 475.50M |
| Net Income | 190.80M | 244.20M | 118.10M | 187.20M | 203.30M |
Balance Sheet | |||||
| Total Assets | 5.10B | 4.87B | 4.97B | 4.90B | 5.14B |
| Cash, Cash Equivalents and Short-Term Investments | 626.50M | 359.40M | 289.30M | 265.60M | 330.10M |
| Total Debt | 1.63B | 1.91B | 2.03B | 1.98B | 1.97B |
| Total Liabilities | 2.41B | 2.48B | 2.63B | 2.55B | 2.64B |
| Stockholders Equity | 2.67B | 2.38B | 2.33B | 2.33B | 2.48B |
Cash Flow | |||||
| Free Cash Flow | 227.60M | 293.60M | 283.10M | 249.90M | 276.20M |
| Operating Cash Flow | 289.80M | 362.00M | 335.80M | 297.70M | 322.50M |
| Investing Cash Flow | 286.10M | -73.80M | -250.20M | -75.20M | -568.90M |
| Financing Cash Flow | -320.40M | -206.60M | -58.70M | -275.60M | 290.00M |
Element Solutions Technical Analysis
Positive
33.94
Price Trends
32.37
Positive
29.37
Positive
27.13
Positive
Market Momentum
0.49
Negative
54.16
Neutral
63.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESI, the sentiment is Positive. The current price of 33.94 is above the 20-day moving average (MA) of 32.76, above the 50-day MA of 32.37, and above the 200-day MA of 27.13, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 54.16 is Neutral, neither overbought nor oversold. The STOCH value of 63.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $5.43B | 31.59 | 12.31% | 0.61% | 7.55% | 22.43% | |
70 Outperform | $8.27B | 31.70 | 7.29% | 1.25% | 3.87% | -10.30% | |
68 Neutral | $8.36B | 15.45 | 8.09% | 5.33% | -3.33% | -19.59% | |
66 Neutral | $6.02B | 15.40 | 25.38% | 1.59% | -1.11% | 5.15% | |
65 Neutral | $3.92B | 29.50 | 11.63% | 1.70% | 4.25% | 56.51% | |
65 Neutral | $5.63B | 18.46 | 16.86% | ― | -1.83% | 40.64% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
ESI
Element Solutions
33.94
16.65
96.33%
BCPC
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169.58
20.00
13.37%
EMN
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73.29
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NEU
Newmarket
641.01
129.66
25.36%
SXT
Sensient Technologies
92.21
24.60
36.39%
AXTA
Axalta Coating Systems
26.39
-2.10
-7.37%
Element Solutions Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Element Solutions Amends Credit Facility to Fund Micromax Acquisition
Positive
Feb 2, 2026
On February 2, 2026, Element Solutions Inc and its subsidiary MacDermid, Incorporated, amended their existing credit agreement to add $450 million of new U.S. dollar term loans fungible with the company’s existing term loan B and to replace ...
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.