Orion Engineered (OEC) AI Stock Analysis

• Market Cap: $591.82M
• Dividend Yield: 0.79%
• Average Volume (3M): 604.68K
• Price to Earnings (P/E): 39.1
• Beta (1Y): 1.23
• Revenue Growth: -3.79%
• EPS Growth: -79.76%
• Country: US
• Employees: 1,658
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Chemicals - Specialty
• EPS (TTM): 0.32
• Shares Outstanding: 56,149,708
• 10 Day Avg. Volume: 439,567
• 30 Day Avg. Volume: 604,683
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.65
• Enterprise Value/Revenue: 0.85
• Enterprise Value/Gross Profit: 3.99
• Enterprise Value/Ebitda: 9.66
• 1Y Price Target: $9.00
• Price Target Upside: -14.20% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 53 Neutral
• Price Target: $11.00 ▲(4.86% Upside)

Orion Engineered's overall stock score is driven by moderate financial performance and technical analysis, with valuation concerns due to a high P/E ratio. The earnings call provided some positive strategic shifts, and the interim dividend announcement supports shareholder value. However, challenges in profitability and market conditions weigh on the score.

Positive Factors

Cash Flow

Orion is expected to have a free cash flow yield of approximately 15.5% due to sharply lower anticipated capital expenditures following the completion of an expansion project.

Market Position

Orion is a leading producer of carbon black, with a strong market position and over 900,000 tons in annual volume and 9% market share.

Share Repurchases

OEC acquired 0.5M shares, and net shares outstanding have been reduced by 6% over past 2 years, indicating opportunistic share repurchases as an attractive allocation of capital.

Negative Factors

Price Target Reduction

The price target for Orion was decreased from $18 to $12, reflecting a more cautious outlook.

Rubber Demand

OEC's rubber black demand continues to be negatively impacted by tire imports into Western markets.

Valuation Risk

The investment rating on Orion was lowered from Overweight to Neutral due to economic uncertainties creating valuation risk.

Orion Engineered Business Overview & Revenue Model

Company Description

Orion Engineered Carbons S.A., together with its subsidiaries, manufactures and sells carbon black products in Germany, the United States, South Korea, Brazil, China, South Africa, the rest of Europe, and internationally. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for polymers, coatings, and battery electrodes. It also provides rubber carbon black products for applications in mechanical rubber goods under the PUREX brand, as well as in tires under the ECORAX brand name. The company was formerly known as Orion Engineered Carbons S.à r.l. and changed its name to Orion Engineered Carbons S.A. in July 2014. Orion Engineered Carbons S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.

How the Company Makes Money

Orion Engineered Carbons generates revenue primarily through the production and sale of carbon black products. The company operates on a B2B model, supplying its products to manufacturers in various industries, including automotive, coatings, and plastics. Key revenue streams include the sale of standard and specialty carbon blacks, which are utilized in tire manufacturing and other rubber applications, as well as in coatings and plastics for enhanced performance. Additionally, OEC benefits from long-term contracts with major customers, which provide stability and predictable income. The company also invests in research and development to create innovative products and improve production efficiencies, further enhancing its revenue potential. Strategic partnerships with leading companies in the automotive and industrial sectors play a significant role in expanding OEC's market reach and driving sales growth.

Orion Engineered Financial Statement Overview

Summary

Orion Engineered faces challenges in revenue growth and profitability, with declining margins and high leverage. While there is improvement in free cash flow, the company needs to address its debt levels and operational efficiency to enhance financial health. The overall financial position is moderate, with potential risks due to high leverage and declining profitability.

Income Statement

Orion Engineered's income statement shows a declining revenue trend with a negative growth rate in the TTM period. The gross profit margin has decreased from previous years, and the net profit margin is low at 0.82% in TTM. EBIT and EBITDA margins have also declined, indicating reduced operational efficiency. Overall, the company faces challenges in maintaining profitability and revenue growth.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.19 in TTM, indicating significant leverage. Return on equity has decreased over time, reflecting lower profitability on shareholders' investments. The equity ratio is stable, but the high leverage poses potential risks. The company needs to manage its debt levels to improve financial stability.

Cash Flow

The cash flow statement shows a significant improvement in free cash flow growth in the TTM period, which is a positive sign. However, the operating cash flow to net income ratio is low, suggesting challenges in converting income into cash. The free cash flow to net income ratio is moderate, indicating some efficiency in cash generation. Overall, cash flow management shows improvement but remains a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.84B	1.88B	1.89B	2.03B	1.55B	1.14B
Gross Profit	393.30M	428.80M	451.00M	448.80M	386.60M	292.35M
EBITDA	162.60M	225.90M	327.20M	302.80M	244.90M	149.89M
Net Income	15.10M	44.20M	103.50M	106.20M	134.70M	18.20M
Balance Sheet
Total Assets	2.02B	1.86B	1.83B	1.89B	1.63B	1.39B
Cash, Cash Equivalents and Short-Term Investments	42.60M	44.20M	37.50M	60.80M	65.70M	68.50M
Total Debt	1.02B	1.03B	927.20M	915.30M	782.90M	738.44M
Total Liabilities	1.56B	1.38B	1.35B	1.43B	1.31B	1.21B
Stockholders Equity	466.50M	474.90M	478.50M	459.40M	319.70M	181.01M
Cash Flow
Free Cash Flow	63.10M	-81.40M	173.10M	-151.80M	-69.50M	-19.66M
Operating Cash Flow	118.05M	125.30M	345.90M	81.00M	145.20M	125.28M
Investing Cash Flow	-190.30M	-206.70M	-172.80M	-232.80M	-214.70M	-144.94M
Financing Cash Flow	79.80M	89.30M	-197.10M	149.30M	73.30M	13.54M

Orion Engineered Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OEC, the sentiment is Positive. The current price of 10.49 is above the 20-day moving average (MA) of 10.41, below the 50-day MA of 10.57, and below the 200-day MA of 12.80, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 50.91 is Neutral, neither overbought nor oversold. The STOCH value of 68.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OEC.

Orion Engineered Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ODC	82 Outperform	$865.68M	18.51	20.93%	0.99%	9.92%	17.12%
SCL	67 Neutral	$1.13B	19.75	4.77%	3.16%	2.64%	66.43%
KRO	64 Neutral	$740.94M	10.97	8.33%	3.18%	6.51%	3457.58%
Sector *	61 Neutral	$10.41B	7.18	-0.06%	2.87%	2.87%	-36.73%
ECVT	59 Neutral	$1.05B	17.67	-1.97%	―	4.93%	-124.60%
OEC	53 Neutral	$591.82M	39.14	3.11%	0.79%	-3.79%	-79.76%
CC	51 Neutral	$2.34B	59.33	-87.50%	4.05%	2.48%	-459.90%

Orion Engineered Corporate Events

Orion Engineered Announces CFO Jeff Glajch’s Retirement

On July 30, 2025, Orion S.A. announced the upcoming retirement of its Chief Financial Officer, Jeff Glajch, effective early in the fourth quarter of 2025. Glajch’s retirement is not due to any disagreements with the company, and he will assist in the transition until the end of the year. Orion’s CEO, Corning Painter, expressed gratitude for Glajch’s contributions, noting that his leadership has strengthened the company’s finance and IT teams, positioning Orion for future growth. A comprehensive search for Glajch’s successor will be initiated.

Orion Engineered Declares Interim Dividend Announcement

On June 26, 2025, Orion S.A. announced the declaration of an interim dividend of $0.0207 per common share, totaling approximately $1.2 million, to be paid on October 8, 2025. This move reflects Orion’s continued commitment to returning value to its shareholders and may enhance its market positioning as a reliable investment, while stakeholders should note the 15% Luxembourg withholding tax applicable to the dividend.

Orion Engineered Approves Key Decisions at AGM

On June 26, 2025, Orion S.A. held its Annual General Meeting of Shareholders, where all proposed matters were approved. Key decisions included the election of several directors for terms ending in 2025, the approval of board and executive compensation, and the ratification of financial statements for 2024. Additionally, Ernst & Young was appointed as the independent auditor, and the board was authorized to purchase company shares for five years.