Education
About Us
Working with TipRanks
Follow Us
Quaker Chemical (KWR)
NYSE:KWR
Top Page
Quaker Chemical
(NYSE:KWR)
Select Model
Select Model
Rating:62Neutral
Price Target:
$180.00
▲(22.42% Upside)
Action:ReiteratedDate:02/24/26
The score is driven primarily by a mixed financial picture: solid and improving free cash flow and manageable leverage are offset by a notable 2025 profitability reset. Technicals add support with a clear uptrend and healthy momentum. Valuation is a drag due to the negative P/E, while the earnings call modestly supports the outlook with guided 2026 adjusted EBITDA growth and share gains tempered by cash flow and operational headwinds.
Positive Factors
Strong free cash flow generation
Consistent positive operating and free cash flow, with strong FCF improvement in 2025, supports internal funding for capex, dividends, buybacks and disciplined M&A. This cash convertibility cushions profit volatility and funds strategic investments without immediate reliance on external financing.
Asia Pacific regional strength and organic growth
Repeated organic volume gains and a 15% Asia Pacific sales increase reflect durable regional momentum. Sustained share gains and ten consecutive quarters of growth provide a scalable revenue base, diversify geographic exposure, and reduce dependence on weaker Americas/EMEA markets.
Disciplined, revenue-accretive M&A
Acquisitions that added meaningful annualized revenue demonstrate disciplined dealmaking that expands TAM and product capabilities. If integration and cross-sell maintain momentum, these deals provide a durable top-line tailwind and potential margin synergies supporting medium-term growth.
Negative Factors
Profitability volatility and large noncash charges
The sizable goodwill impairment and restructuring write-offs that produced a 2025 GAAP loss reveal prior overhangs from acquisitions and one-time costs. These charges reduce reported equity, increase earnings volatility, and mean management must sustain higher EBITDA to rebuild returns and justify goodwill on the balance sheet.
Material decline in operating cash flow
A sharp drop in operating cash flow, driven by higher restructuring outflows and working capital builds, weakens financial flexibility. Until cash conversion stabilizes, the company may face constraints on discretionary investments, M&A funding or shareholder returns, increasing reliance on leverage during downturns.
Soft end markets and tariff-driven demand risk
Persistent softness in core end markets and tariff-related trade friction represent structural demand headwinds that can cap organic growth and pressure pricing. Even with share gains, a flat market backdrop limits revenue expansion and makes margin recovery and sustained profitability more challenging.
Quaker Chemical (KWR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.55B
Dividend Yield1.37%
Average Volume (3M)132.77K
Price to Earnings (P/E)―
Beta (1Y)1.05
Revenue Growth0.08%
EPS Growth-107.33%
CountryUS
Employees4,400
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.65
Shares Outstanding17,335,075
10 Day Avg. Volume151,729
30 Day Avg. Volume132,768
Financial Highlights & Ratios
PEG Ratio9.44
Price to Book (P/B)1.75
Price to Sales (P/S)1.27
P/FCF Ratio29.77
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue1.75
Enterprise Value/Gross Profit4.97
Enterprise Value/Ebitda22.16
Forecast
1Y Price Target
$177.00Price Target Upside20.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)8.09
Revenue Forecast (FY)$1.97B
Quaker Chemical Business Overview & Revenue Model
Company DescriptionQuaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications. The company operates through four segments: Americas; Europe, Middle East, and Africa; Asia/Pacific; and Global Specialty Businesses. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, metal finishing fluids, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, can, mining, and metalworking companies. The company was formerly known as Quaker Chemical Products Corporation and changed its name to Quaker Chemical Corporation in August 1962. Quaker Chemical Corporation was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.
How the Company Makes MoneyQuaker Chemical generates revenue primarily through the sale of its chemical products and services to industrial customers across multiple sectors. The company has a diverse revenue model that includes direct sales, long-term contracts, and partnerships with major manufacturers. Key revenue streams arise from the provision of metalworking fluids, industrial lubricants, and specialty chemicals, which are essential for optimizing manufacturing processes and improving equipment performance. Additionally, Quaker Chemical benefits from ongoing relationships with clients, often providing customized solutions and technical support, which fosters customer loyalty and recurring business. Strategic partnerships and acquisitions also play a significant role in expanding its product offerings and market reach, contributing to overall earnings.
Quaker Chemical Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call conveyed a cautiously optimistic tone: the company delivered solid Q4 results with double-digit adjusted EBITDA and EPS growth, demonstrated strong and consistent momentum in Asia Pacific, achieved net share gains and meaningful run-rate cost savings, and continued disciplined M&A and shareholder returns. However, material challenges remain — notably a significant drop in operating cash flow year-over-year, an $89 million goodwill impairment and notable restructuring costs, Q4 operational disruptions and customer outages, sequential margin pressure in North America, and soft end markets with tariff-related uncertainty. Taken together, the operational and cash-generation headwinds are meaningful but are balanced by clear revenue momentum, margin recovery plans, and a strengthened balance sheet — leading management to expect YoY adjusted EBITDA growth in 2026.Q4-2025 Updates
Positive Updates
Revenue Growth and Top-Line Performance
Q4 net sales of $468 million, up 6% year-over-year. Full-year revenue benefited from acquisitions (three closed in 2025 adding ~ $95 million of annualized revenue) and price/mix in some regions.
Adjusted EBITDA and Margin Improvement
Adjusted EBITDA of $72 million in Q4, an 11% increase year-over-year, with adjusted EBITDA margin improving to 15.3% (up 75 basis points YoY). Management expects continued YoY adjusted EBITDA growth in 2026.
Earnings Per Share Performance
Q4 non-GAAP diluted EPS of $1.65, a 24% increase year-over-year. Full-year non-GAAP diluted EPS of $7.02 after adjusting for non-GAAP items.
Asia Pacific Strength and Consistent Organic Growth
Asia Pacific net sales increased 15% in Q4 and 13% for the full year; organic volume growth in Asia Pacific was +4% in Q4 and +5% for the year — the 10th consecutive quarter of year-over-year volume growth in the region.
Net Share Gains and New Business Wins
Net share gains of approximately 4% in Q4 helped offset soft markets; the company reported new business wins across all regions and successful cross-selling initiatives.
Acquisition Contributions and Integration
Acquisitions contributed ~6% to Q4 sales (Dipsol contributed $21 million in Q4). Company completed three acquisitions in 2025 and expects continued disciplined M&A to expand TAM and capabilities.
Cost Savings and Structural Initiatives
Complexity and cost reduction plan generated roughly $25 million of run-rate savings for the full year; identified additional network and process optimization actions (e.g., Dortmund closure) expected to deliver incremental savings ($2 million in 2026, ~$5 million annually beginning 2027).
Balance Sheet and Capital Allocation
Net debt at year-end was $691 million with net leverage reduced to 2.3x trailing 12-month adjusted EBITDA. Returned $76 million to shareholders in 2025 (share repurchases $42 million; dividends $34 million) and continued investment in growth (full-year capex $56 million, China facility under construction).
Negative Updates
Significant Decline in Operating Cash Flow
Operating cash flow was $47 million in Q4 (down from $63 million prior-year quarter) and $136 million for the full year versus $205 million in 2024 — a meaningful reduction driven by higher restructuring outflows and working capital increases.
Full-Year GAAP Loss and Large Noncash Charges
Full-year GAAP diluted loss per share of $(0.14) driven by an $89 million noncash goodwill impairment charge and $35 million of restructuring charges, which materially impacted GAAP results for 2025.
Operational Disruptions and Weather-Related Impacts
December operational issues in U.S. plants (frozen pipes, boiler issues, transportation delays) and a major North American customer outage negatively impacted volumes (management estimates ~1% volume impact in Q4 and up to $5–$10 million revenue impact), delaying shipments and increasing costs.
Sequential Margin Pressure
Gross margin was roughly flat year-over-year (35.3% vs 35.2% prior-year Q4) but fell sequentially by ~150 basis points from Q3 due to unfavorable absorption and higher maintenance, repair and raw material disposal costs in North America.
Working Capital and Inventory Build-up
Increased working capital and temporary inventory increases (particularly in EMEA) related to network optimization and the Dortmund facility closure contributed to reduced cash generation and higher capital deployed into inventory.
Higher Restructuring and One-Time Costs
Higher year-over-year restructuring charges (~$29 million incremental) plus approximately $7 million of acquisition-assessment costs in Q4 increased nonoperating cash outflows and reduced free cash generation.
Market Softness and External Headwinds
Underlying markets in the Americas and EMEA remain soft (PMIs near 50), tariff uncertainty continues to disrupt trade flows, and company expects underlying markets to be flat in 2026 with only potential H2 improvement — representing demand risk.
SG&A and Inflationary Pressures
Total SG&A increased ~4% in Q4 (driven by acquisitions and FX) despite organic SG&A being ~4% lower at constant currency; management expects higher SG&A in 2026 from variable compensation and inflationary pressures.
Company Guidance
Guidance for 2026: management expects underlying markets to be roughly flat in 2026 with the potential for modest H2 improvement, and targets net share gains of 2%–4%; they expect gross margin to be within a 36%–37% range for the full year, raw material costs to remain steady early in the year, and positive organic growth and share gains in all segments. They forecast year‑over‑year adjusted EBITDA growth for 2026 (and expect Q1 to be the third consecutive quarter of YoY EBITDA improvement), driven by share gains, gross‑margin recovery and the run‑rate impact of acquisitions (Dipsol contributed $21M in Q4; 3 acquisitions in 2025 added ~$95M of annualized revenue and provide roughly a 1%–2% tailwind). SG&A will be higher year‑over‑year due to variable compensation and inflation but will be partially offset by transformational cost actions (they generated ~$25M of run‑rate savings in 2025); the longer‑term goal is to sustain EBITDA margins above 18% with modest targeted investments. Capital spend is expected to be ~2.5%–3.5% of sales in 2026, the balance sheet supports disciplined M&A (year‑end net debt $691M; net leverage ~2.3x TTM adj. EBITDA), and management expects to continue returning cash to shareholders while improving operating performance.Quaker Chemical Financial Statement Overview
Summary
Overall financial profile is stable but not robust. Cash generation is the clearest strength (positive operating and free cash flow with strong FCF improvement in 2025), while earnings consistency is the key concern given the sharp profitability deterioration in 2025 (net margin turning slightly negative and EBITDA margin down materially vs. 2024). Leverage remains manageable, though it ticked up in 2025.Income Statement
Revenue has been essentially flat over the last few years (down in 2024, modest rebound in 2025), but profitability has been volatile. Gross margin stayed relatively steady in the mid-30% range, yet earnings swung from losses (2022, 2025) to solid profits (2021–2024). The sharp deterioration in 2025—net margin turning slightly negative and EBITDA margin dropping materially versus 2024—raises concerns about cost pressure and/or one-time headwinds.52
Neutral
Balance Sheet
Leverage looks manageable for the business, with debt-to-equity generally in a mid-range band, but it ticked up in 2025 as debt rose. Equity has remained fairly stable, supporting balance-sheet resilience. However, returns on equity have been inconsistent, including a negative year (2022) and a likely setback in 2025 given the net loss, which limits the quality of the capital base from a profitability standpoint.62
Positive
Cash Flow
Cash generation is a relative strength: operating cash flow and free cash flow were positive across the period, and free cash flow improved strongly in 2025 versus 2024. That said, cash flow has been uneven historically (weak in 2021–2022, much stronger in 2023–2025). Also, with net income slightly negative in 2025, the relationship between cash flow and earnings should be monitored for sustainability.68
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.89B | 1.84B | 1.95B | 1.94B | 1.76B |
| Gross Profit | 616.37M | 686.03M | 705.64M | 612.65M | 594.64M |
| EBITDA | 162.66M | 280.18M | 285.81M | 120.16M | 255.87M |
| Net Income | -2.49M | 116.64M | 112.75M | -15.93M | 121.37M |
Balance Sheet | |||||
| Total Assets | 2.80B | 2.61B | 2.71B | 2.82B | 2.96B |
| Cash, Cash Equivalents and Short-Term Investments | 179.83M | 188.88M | 194.53M | 180.96M | 165.18M |
| Total Debt | 928.61M | 737.82M | 788.97M | 991.80M | 929.66M |
| Total Liabilities | 1.42B | 1.26B | 1.33B | 1.54B | 1.57B |
| Stockholders Equity | 1.37B | 1.35B | 1.38B | 1.28B | 1.39B |
Cash Flow | |||||
| Free Cash Flow | 80.60M | 215.86M | 240.22M | 13.26M | 27.48M |
| Operating Cash Flow | 136.45M | 204.58M | 279.02M | 41.79M | 48.93M |
| Investing Cash Flow | -214.12M | -76.42M | -27.62M | -40.19M | -49.13M |
| Financing Cash Flow | 61.83M | -122.66M | -238.61M | 24.67M | -13.46M |
Quaker Chemical Technical Analysis
Negative
147.03
Price Trends
155.67
Negative
144.39
Positive
134.11
Positive
Market Momentum
-0.46
Positive
33.07
Neutral
9.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KWR, the sentiment is Negative. The current price of 147.03 is below the 20-day moving average (MA) of 167.11, below the 50-day MA of 155.67, and above the 200-day MA of 134.11, indicating a neutral trend. The MACD of -0.46 indicates Positive momentum. The RSI at 33.07 is Neutral, neither overbought nor oversold. The STOCH value of 9.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KWR.
Quaker Chemical Risk Analysis
Quaker Chemical disclosed 30 risk factors in its most recent earnings report. Quaker Chemical 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
Quaker Chemical Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.21B | 36.19 | 36.41% | 1.87% | 4.98% | 30.84% | |
73 Outperform | $1.90B | 16.41 | -0.09% | 2.19% | -4.49% | -100.80% | |
63 Neutral | $2.19B | -138.28 | -1.07% | 0.74% | -2.53% | -100.23% | |
62 Neutral | $2.55B | -1,217.14 | -0.64% | 1.37% | 0.08% | -107.33% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
59 Neutral | $2.85B | -4.15 | -29.98% | 2.79% | -13.67% | -608.89% | |
56 Neutral | $2.54B | -15.49 | -38.91% | ― | -13.39% | 88.25% |
* Basic Materials Sector Average
KWR
Quaker Chemical
147.03
15.68
11.94%
ASH
Ashland
62.36
5.67
10.01%
IOSP
Innospec
76.58
-20.70
-21.28%
MTX
Minerals Technologies
70.62
3.58
5.33%
WDFC
WD-40 Company
238.20
3.58
1.53%
NGVT
Ingevity
72.03
26.79
59.22%
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.