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Innospec Inc (IOSP)
NASDAQ:IOSP
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Innospec
(NASDAQ:IOSP)
Rating:66Neutral
Price Target:
$98.00
▲( 14.51% Upside)
Innospec (IOSP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.14B
Dividend Yield1.81%
Average Volume (3M)164.60K
Price to Earnings (P/E)80.8
Beta (1Y)1.01
Revenue Growth-7.91%
EPS Growth-81.73%
CountryUS
Employees2,450
SectorBasic Materials
Sector Strength64
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.42
Shares Outstanding24,960,000
10 Day Avg. Volume192,402
30 Day Avg. Volume164,604
Financial Highlights & Ratios
PEG Ratio-0.84
Price to Book (P/B)1.86
Price to Sales (P/S)0.00
P/FCF Ratio18.65
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue0.27
Enterprise Value/Gross Profit3.74
Enterprise Value/Ebitda2.28
Forecast
1Y Price Target
$115.00Price Target Upside34.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Innospec Business Overview & Revenue Model
Company DescriptionInnospec Inc. (IOSP) is a global specialty chemicals company that develops, manufactures, and markets a range of innovative chemical products. The company's operations are segmented into three primary areas: Fuel Specialties, Performance Chemicals, and Oilfield Services. Innospec serves diverse industries, including automotive, oil and gas, personal care, and household care, providing products that improve fuel efficiency, enhance performance, and deliver environmental benefits.
How the Company Makes MoneyInnospec generates revenue through the sale of specialty chemicals across its three main business segments. In the Fuel Specialties segment, the company earns income by supplying fuel additives that enhance the performance and efficiency of fuels, catering primarily to refineries and fuel producers. The Performance Chemicals segment focuses on personal care, home care, and industrial applications, providing surfactants and other ingredients that improve product efficacy and consumer appeal. The Oilfield Services segment supports the oil and gas industry with chemicals and services that facilitate production and extraction processes. Innospec's revenue model is bolstered by strategic partnerships with industry leaders and a commitment to research and development, which drives innovation and the creation of high-value products tailored to customer needs.
Innospec Financial Statement Overview
Summary
Innospec presents a mixed financial performance with a strong balance sheet and cash flow generation, offset by declining revenue and profit margins. The company exhibits financial stability with low leverage and efficient cash flow management, though facing challenges in revenue growth and profitability.Income Statement
Innospec's revenue has declined in the latest year, indicating a challenging market environment. The gross profit margin stands at 29.42%, and the net profit margin is 1.93%, both showing a downward trend, reflecting increased cost pressures. However, the EBIT margin of 9.64% and EBITDA margin of 9.64% remain relatively stable, suggesting operational efficiency.72
Positive
Balance Sheet
The company's balance sheet is robust, with a low debt-to-equity ratio of 0.04, indicating minimal leverage risk. The return on equity (ROE) is 2.94%, showcasing modest profitability. A high equity ratio of 69.82% demonstrates strong asset coverage by equity, providing financial stability.85
Very Positive
Cash Flow
Free cash flow has grown by 10.00% year-over-year, reflecting improved cash generation. The operating cash flow to net income ratio of 5.18 highlights strong cash conversion efficiency, while the free cash flow to net income ratio of 4.02 suggests effective cash management strategies.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.85B | 1.95B | 1.96B | 1.48B | 1.19B | Gross Profit |
| 542.90M | 591.10M | 586.70M | 434.90M | 342.70M | EBIT |
| 177.90M | 161.60M | 187.30M | 132.10M | 82.60M | EBITDA |
| 224.60M | 200.90M | 187.30M | 182.10M | 92.20M | Net Income Common Stockholders |
| 35.60M | 139.10M | 133.00M | 93.10M | 28.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 289.20M | 203.70M | 147.10M | 141.80M | 105.30M | Total Assets |
| 1.73B | 1.71B | 1.60B | 1.57B | 1.40B | Total Debt |
| 44.90M | 45.20M | 45.30M | 35.60M | 40.80M | Net Debt |
| -244.30M | -158.50M | -101.80M | -106.20M | -64.50M | Total Liabilities |
| 518.60M | 557.80M | 563.30M | 537.90M | 452.50M | Stockholders Equity |
| 1.21B | 1.15B | 1.04B | 1.03B | 944.90M |
| Cash Flow | Free Cash Flow | |||
| 143.10M | 130.10M | 39.40M | 54.10M | 116.20M | Operating Cash Flow |
| 184.50M | 207.30M | 81.70M | 93.20M | 145.90M | Investing Cash Flow |
| -62.00M | -111.80M | -42.10M | -36.20M | -29.70M | Financing Cash Flow |
| -35.30M | -39.00M | -33.70M | -20.00M | -86.80M |
Innospec Technical Analysis
Negative
85.58
Price Trends
90.21
Negative
98.58
Negative
104.97
Negative
Market Momentum
-1.07
Positive
36.98
Neutral
8.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IOSP, the sentiment is Negative. The current price of 85.58 is below the 20-day moving average (MA) of 88.99, below the 50-day MA of 90.21, and below the 200-day MA of 104.97, indicating a bearish trend. The MACD of -1.07 indicates Positive momentum. The RSI at 36.98 is Neutral, neither overbought nor oversold. The STOCH value of 8.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 1 New Risks
1.
Our ability to monitor and manage our business performance is dependent upon the effectiveness of our information technology systems. Q4, 2024
Innospec Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.67B | 31.90 | 19.47% | 0.54% | 6.01% | 12.38% | |
68 Neutral | $1.88B | 20.20 | 6.78% | 1.79% | -5.72% | -19.82% | |
66 Neutral | $2.14B | 80.83 | 2.21% | 1.81% | -7.91% | -81.73% | |
58 Neutral | $2.23B | 38.13 | 2.94% | 4.13% | -1.13% | -81.74% | |
53 Neutral | $2.85B | ― | -28.05% | 2.00% | -4.31% | -1421.83% | |
50 Neutral | $1.99B | -1.06 | -21.34% | 3.71% | 2.03% | -30.65% | |
44 Neutral | $2.25B | 21.03 | -3.02% | 3.29% | -7.63% | -157.37% |
* Basic Materials Sector Average
Performance Comparison
IOSP
Innospec
85.58
-40.82
-32.29%
ASH
Ashland
49.30
-48.79
-49.74%
HWKN
Hawkins
128.50
41.38
47.50%
OLN
Olin
19.35
-32.99
-63.03%
KWR
Quaker Chemical
106.48
-72.59
-40.54%
SSL
Sasol
4.56
-2.43
-34.76%
Innospec Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q4-2024)
| % Change Since: -7.50%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
Innospec's earnings call highlighted strong performance in the Performance Chemicals and Fuel Specialties segments, along with a solid cash position and increased dividends. However, significant challenges were noted in the Oilfield Services segment, a decrease in overall revenues, and a net loss due to a pension settlement charge. The sentiment is mixed with notable strengths and significant challenges.Q4-2024 Updates
Positive Updates
Performance Chemicals Growth
Performance Chemicals delivered double-digit operating income growth over the fourth quarter last year, with revenues up 23% from $137.2 million to $169.2 million. Operating income increased by 14% to $20.6 million, and for the full year, it increased by 52% to $82.9 million.
Fuel Specialties Improvement
Fuel Specialties saw a 7% increase in operating income over the same quarter last year, with revenues up 5% to $191.8 million. Gross margins improved by 1.5 percentage points to 34.4%.
Cash Position and No Debt
Innospec ended the year with $289.2 million in cash and cash equivalents and no debt, providing significant financial flexibility.
Dividend Increase
The total dividend for the full year increased by 10% over 2023 to $1.55 per share.
Negative Updates
Oilfield Services Decline
Oilfield Services revenues for the quarter were $105.8 million, down 40% from $175.4 million in the fourth quarter last year. Gross margins decreased by 7.9 percentage points to 30.1%, and operating income fell 59% to $7.5 million.
Overall Revenue Decrease
The company's total revenues for the fourth quarter were $466.8 million, a 6% decrease from $494.7 million a year ago. Full year revenues decreased 5% from $1.95 billion in 2023 to $1.85 billion in 2024.
Net Loss Due to Pension Settlement
The company incurred a non-cash settlement charge of $155.6 million related to the buyout of the UK pension scheme, resulting in a net loss for the quarter of $70.4 million.
Adjusted EPS Decline
Adjusted EPS for the quarter was $1.41, down from $1.84 a year ago. For the full year, adjusted EPS was $5.92 compared to $6.09 a year ago.
Company Guidance
In the fourth quarter of 2024, Innospec reported total revenues of $466.8 million, marking a 6% decline from the $494.7 million reported in the same quarter of the previous year. The company experienced a decrease in gross margin by 2.3 percentage points, bringing it to 29.2%. Adjusted EBITDA for the quarter was $56.6 million, down from $61.6 million the previous year. A non-cash settlement charge of $155.6 million related to a UK pension scheme buyout resulted in a net loss of $70.4 million for the quarter; however, after adjustments, net income was $46.3 million, an increase from $37.8 million in the prior year. The adjusted earnings per share (EPS) for the quarter was $1.41, compared to $1.84 in the previous year. For the full year, revenues fell 5% to $1.85 billion, with an adjusted EBITDA increase to $225.2 million from $216 million in 2023. The adjusted EPS for the year was $5.92, slightly down from $6.09 the previous year. Performance Chemicals saw a 23% year-over-year revenue increase to $169.2 million, while Fuel Specialties increased by 5% to $191.8 million. In contrast, Oilfield Services revenue dropped by 40% to $105.8 million. Cash from operations after capital expenditures for the year was $122.7 million, with the company ending the year with $289.2 million in cash and no debt. For 2025, Innospec expects continued growth in Performance Chemicals and Fuel Specialties, with a gradual recovery in Oilfield Services, and anticipates a full-year effective tax rate of around 27%.Innospec Corporate Events
Executive/Board ChangesShareholder Meetings
Innospec Shareholders Approve Directors and Compensation
Positive
May 14, 2025
At the annual meeting of Innospec shareholders on May 9, 2025, three Class III directors were elected, and the advisory approval of the company’s executive compensation was passed. Additionally, the appointment of the company’s independent registered public accounting firm for 2025 was ratified, indicating shareholder support for the company’s leadership and financial oversight.
The most recent analyst rating on (IOSP) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on Innospec stock, see the IOSP Stock Forecast page.
Stock BuybackDividendsFinancial Disclosures
Innospec Announces Dividend Increase and Share Buyback
Positive
May 9, 2025
Innospec Inc. reported its first quarter 2025 financial results, highlighting a balanced performance amidst market volatility. The company experienced excellent growth in Fuel Specialties, which offset lower results in Performance Chemicals and Oilfield Services. Total revenues decreased by 12% compared to the previous year, with net income also declining. Despite these challenges, Innospec declared a 10% increase in its semi-annual dividend and initiated a $50 million share buyback, reflecting confidence in its financial stability. The company remains focused on delivering full-year operating income growth and margin improvement, although uncertainties related to tariff policies may delay progress in some areas.
Stock BuybackBusiness Operations and Strategy
Innospec Announces New $50 Million Share Buyback
Positive
Mar 11, 2025
On March 10, 2025, Innospec Inc. announced that its Board of Directors authorized a new $50 million share repurchase program, following the expiration of a similar program earlier in the year. This strategic move, supported by the company’s strong financial position with over $289 million in net cash, aims to provide flexibility for mergers and acquisitions, organic investments, dividend growth, and further share repurchases, potentially impacting the company’s market positioning and shareholder value.
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.