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Innospec
(NASDAQ:IOSP)
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Rating:77Outperform
Price Target:
$98.00
▲(15.62% Upside)
Action:Reiterated
Date:08/05/26
IOSP scores well primarily due to strong financial resilience (very low leverage) and a constructive earnings-call outlook that points to operating-income growth and capacity-driven upside. Technicals are also supportive with the stock above key moving averages and positive momentum. The main constraints on the score are only moderate valuation attractiveness and the business’s recent revenue/earnings volatility, including near-term margin and cash-conversion headwinds noted by management.
Positive Factors
Strong balance sheet & liquidity
Innospec’s net-cash position and negligible leverage provide durable financial flexibility. With ~$250M cash and no debt management can fund plant upgrades, maintain dividends and buybacks, and pursue targeted investments or M&A without stressing liquidity over the next 6–12 months.
Negative Factors
Top‑line volatility and weakness
Persistent revenue weakness and volatility limit sustainable operating leverage and make profitable growth harder to achieve. If end‑market demand or pricing fails to firm, margin recovery and resulting cash flow improvements will be constrained, raising execution risk over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong balance sheet & liquidity
Innospec’s net-cash position and negligible leverage provide durable financial flexibility. With ~$250M cash and no debt management can fund plant upgrades, maintain dividends and buybacks, and pursue targeted investments or M&A without stressing liquidity over the next 6–12 months.
Read all positive factors
Innospec Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Breaks down operating profit across Innospec’s business lines (e.g., fuel additives, oilfield chemicals, performance specialties), revealing which segments generate core earnings and which consume resources. Tracks how margin trends, cyclical exposure to oil markets, or restructuring affect overall profitability and where management is allocating capital.
Breaks down operating profit across Innospec’s business lines (e.g., fuel additives, oilfield chemicals, performance specialties), revealing which segments generate core earnings and which consume resources. Tracks how margin trends, cyclical exposure to oil markets, or restructuring affect overall profitability and where management is allocating capital.
Data provided by:
The Fly
The FlyInnospec (IOSP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.29B
Dividend Yield1.9%
Average Volume (3M)292.20K
Price to Earnings (P/E)19.1
Beta (1Y)0.98
Revenue Growth2.87%
EPS Growth534.76%
CountryUS
Employees2,450
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)4.91
Shares Outstanding24,631,046
10 Day Avg. Volume378,556
30 Day Avg. Volume292,198
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)1.44
Price to Sales (P/S)1.07
P/FCF Ratio21.64
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$110.00Price Target Upside29.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)4.81
Revenue Forecast (FY)$1.87B
Innospec Business Overview & Revenue Model
Company Description
Innospec Inc., founded in 1938 as Octel Corp. and rebranded in January 2006, is a global company headquartered in Englewood, Colorado. It focuses on the creation, production, formulation, promotion, and distribution of unique chemical products. Th...
How the Company Makes Money
Innospec makes money by selling specialty chemical products and related services through its three operating segments. (1) Fuel Specialties: Generates revenue from the sale of fuel additives and additive packages used to improve fuel performance, ...
Innospec Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: double-digit revenue growth, strong segment operating income gains (notably oilfield services and performance chemicals), no debt and $250M+ cash, and continued shareholder returns. Key challenges remain from earlier supply disruptions that constrained volumes, some margin compression (particularly in Fuel Specialties) and near-term cash conversion where capex exceeded operating cash in the quarter. Management provided clear remediation plans (plant repairs ~60% complete, expected full optimization by end-Q4 and >10% capacity upside), and guided to further operating income improvement in the second half, suggesting these challenges are being managed and that momentum should improve.Positive Updates
Revenue Growth Across the Business
Total revenues of $491.4M, up 12% YoY from $439.7M, with all businesses contributing double-digit sales growth.
Negative Updates
Supply Disruptions and Missed Volumes
Unplanned outages and winter storm impacts earlier in the year left Performance Chemicals supply constrained in Q2; management indicates some missed volume that will not be recovered until late Q4 or into Q1 next year.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth Across the Business
Total revenues of $491.4M, up 12% YoY from $439.7M, with all businesses contributing double-digit sales growth.
Read all positive updates
Company Guidance
Management guided to further operating‑income growth in the second half of fiscal 2026 for Performance Chemicals and Oilfield Services, with Fuel Specialties expected to deliver a steady performance (Q2 revenues: Performance Chemicals $190.3M, gross margin 17.3%, operating income $16.4M; Fuel Specialties $185.7M, gross margin 36.6%, operating income $36.3M; Oilfield Services $115.4M, gross margin 32.3%, operating income $8.7M). They expect Performance Chemicals plant repairs and optimizations to be complete by end‑Q4 with potential capacity upside “north of 10%” into next year, DRA capacity largely sold out with another expansion under discussion, and sequential improvement in Oilfield Services across 2H26; Fuel Specialties may see some Q3 margin headwind from the lag between pricing and raw‑material inflation but remains in its target margin range. On the balance sheet/cash flow side management highlighted Q2 operating cash flow of $7.2M before $16.5M of capex, cash and equivalents of $250.2M with no debt, continued capital returns (semi‑annual dividend $0.92/share and $6.4M of buybacks in Q2), and an expectation that working‑capital improvements will support increased operating cash flow in 2H26.Innospec Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
88
Very Positive
Cash Flow
68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.84B | 1.78B | 1.85B | 1.95B | 1.96B | 1.48B |
| Gross Profit | 505.90M | 492.40M | 542.90M | 591.10M | 586.70M | 434.90M |
| EBITDA | 171.50M | 187.40M | 224.60M | 213.70M | 225.80M | 173.00M |
| Net Income | 121.50M | 116.60M | 35.60M | 139.10M | 133.00M | 93.10M |
Balance Sheet | ||||||
| Total Assets | 1.85B | 1.83B | 1.73B | 1.71B | 1.60B | 1.57B |
| Cash, Cash Equivalents and Short-Term Investments | 250.20M | 292.50M | 289.20M | 203.70M | 147.10M | 141.80M |
| Total Debt | 47.90M | 52.70M | 44.90M | 45.20M | 45.30M | 35.60M |
| Total Liabilities | 495.20M | 499.50M | 518.60M | 557.80M | 563.30M | 537.90M |
| Stockholders Equity | 1.34B | 1.33B | 1.21B | 1.15B | 1.04B | 1.03B |
Cash Flow | ||||||
| Free Cash Flow | 64.90M | 88.00M | 143.10M | 145.20M | 39.40M | 54.10M |
| Operating Cash Flow | 125.50M | 138.30M | 184.50M | 207.30M | 81.70M | 93.20M |
| Investing Cash Flow | -72.30M | -75.10M | -62.00M | -111.80M | -42.10M | -36.20M |
| Financing Cash Flow | -68.80M | -63.90M | -35.30M | -39.00M | -33.70M | -20.00M |
Innospec Technical Analysis
Positive
84.76
Price Trends
84.20
Positive
80.11
Positive
78.65
Positive
Market Momentum
2.59
Negative
76.90
Negative
88.56
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IOSP, the sentiment is Positive. The current price of 84.76 is below the 20-day moving average (MA) of 86.94, above the 50-day MA of 84.20, and above the 200-day MA of 78.65, indicating a bullish trend. The MACD of 2.59 indicates Negative momentum. The RSI at 76.90 is Negative, neither overbought nor oversold. The STOCH value of 88.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IOSP.
Innospec Risk Analysis
Innospec disclosed 28 risk factors in its most recent earnings report. Innospec reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Innospec Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $2.29B | 19.14 | 9.14% | 2.11% | 2.87% | 534.76% | |
66 Neutral | $2.96B | 30.36 | 7.12% | 1.34% | 7.79% | ― | |
62 Neutral | $1.47B | -540.50 | -0.22% | 2.73% | 7.63% | -104.57% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $3.45B | 65.42 | 2.77% | 2.51% | -1.39% | ― | |
59 Neutral | $2.65B | 50.51 | 85.17% | ― | -12.42% | ― | |
56 Neutral | $2.32B | -33.87 | -4.04% | 0.62% | 4.06% | -3189.89% |
* Basic Materials Sector Average
IOSP
Innospec
93.97
12.36
15.14%
ASH
Ashland
74.58
23.02
44.64%
MTX
Minerals Technologies
73.83
13.26
21.88%
KWR
Quaker Chemical
170.90
40.53
31.09%
SCL
Stepan Company
65.05
16.23
33.26%
NGVT
Ingevity
77.79
23.93
44.43%
Innospec Corporate Events
Executive/Board Changes
Innospec Expands Board, Appoints Shelley Bausch Director
Positive
Jun 4, 2026
Effective June 2, 2026, Innospec’s board expanded its size from seven to eight members and appointed Shelley Bausch as a Class II director, with her term beginning July 1, 2026 and running until the 2027 annual meeting or until a successor i...
Executive/Board ChangesShareholder Meetings
Innospec Shareholders Back Board, Pay Practices at Meeting
Positive
May 13, 2026
At Innospec Inc.’s 2026 Annual Meeting of Stockholders held on May 8, 2026, approximately 91% of the 24,890,467 outstanding shares were represented in person or by proxy, indicating strong shareholder participation in the company’s gov...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Innospec Q1 Results Highlight Dividend Hike, Buyback Plan
Positive
May 8, 2026
Innospec reported first-quarter 2026 revenue of $453.2 million, up 3% year on year, while net income slipped to $30.4 million, or $1.22 per diluted share, with adjusted EPS falling to $1.05 from $1.42. Results reflected strong Fuel Specialties per...
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.