Solventum Corporation (SOLV)
NYSE:SOLV
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Solventum Corporation
(NYSE:SOLV)
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Rating:65Neutral
Price Target:
$89.00
▲(26.28% Upside)
Action:Reiterated
Date:06/06/26
The score is held back most by weak cash generation and negative free cash flow despite strong reported profitability, which is the biggest fundamental risk. Offsetting that, the earnings call reinforced a constructive outlook with reiterated guidance, margin expansion targets, and cost-savings initiatives, while valuation appears inexpensive on a ~10 P/E. Technically the trend is strong, but overbought indicators increase near-term pullback risk.
Positive Factors
Margin expansion and strong profitability
Sustained gross and operating margin improvements reflect durable pricing, mix and cost discipline. Management targets another 50–100bps of operating margin expansion, indicating structural margin tailwinds from SKU rationalization and product mix that can support long‑term earnings power even if revenue growth lags.
Negative Factors
Weak cash generation / negative free cash flow
A persistent gap between accounting earnings and cash flow is a material durability risk. Negative free cash flow limits flexibility to fund debt, buybacks or invest behind growth. Separation costs, tax timing and ERP phasing exacerbate conversion issues and must improve to validate profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin expansion and strong profitability
Sustained gross and operating margin improvements reflect durable pricing, mix and cost discipline. Management targets another 50–100bps of operating margin expansion, indicating structural margin tailwinds from SKU rationalization and product mix that can support long‑term earnings power even if revenue growth lags.
Read all positive factors
Solventum Corporation Key Performance Indicators (KPIs)
Solventum Corporation (SOLV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.28B
Dividend YieldN/A
Average Volume (3M)2.09M
Price to Earnings (P/E)10.0
Beta (1Y)0.66
Revenue Growth-0.28%
EPS Growth277.03%
CountryUS
Employees22,000
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)8.21
Shares Outstanding173,174,710
10 Day Avg. Volume3,062,367
30 Day Avg. Volume2,094,475
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)2.73
Price to Sales (P/S)1.66
P/FCF Ratio-1.38K
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue2.12
Enterprise Value/Gross Profit3.95
Enterprise Value/Ebitda6.35
Forecast
1Y Price Target
$80.44Price Target Upside14.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)6.55
Revenue Forecast (FY)$8.19B
Solventum Corporation Business Overview & Revenue Model
Company Description
Solventum Corporation, established in 2023 and headquartered in Saint Paul, Minnesota, operates as a healthcare entity dedicated to pioneering, producing, and commercializing diverse solutions that address critical needs for both customers and pat...
How the Company Makes Money
Solventum makes money primarily by selling healthcare products and solutions to hospitals, clinics, dental practices, distributors, and other healthcare customers. Key revenue streams include: (1) MedSurg and infection prevention products (e.g., m...
Solventum Corporation Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call conveyed clear operational momentum: Q1 results beat expectations with organic growth, EPS upside (+11% YoY), improved gross margins (+80 bps), strong segment performance (MedSurg, Dental, HIS) and tangible progress on separation, SKU rationalization, and integration of Acera. Management reiterated multiyear savings (Transform for the Future $500M) and an intent to accelerate share repurchases while maintaining full-year guidance. The primary negatives are timing and separation-related volatility: reported sales declined -3% due to acquisition/divestiture impacts, tariff and inflationary headwinds ($100M–$120M range) remain, ERP cutover phasing will drive >$100M of order timing into Q2 that reverses in Q3, and certain legacy product lines (clinician productivity solutions) face double-digit declines. Overall, most issues are described as transitory or manageable via mitigation programs and the company emphasized accelerating margin expansion and product-driven growth, supporting a constructive outlook.Positive Updates
Q1 Results Ahead of Plan and Expectations
Reported Q1 sales of $2.0 billion with organic sales growth of +2.1% and adjusted EPS of $1.48 (+11% YoY), both ahead of plan and Street expectations; company reiterated full-year organic sales and free cash flow guidance and now expects EPS toward the high end of $6.40–$6.60.
Negative Updates
Reported Sales Decline and Reporting Headwinds
Reported sales decreased -3.0% YoY driven by a 780 basis point net headwind from acquisitions and divestitures, partially offset by a +270 basis point foreign currency benefit; timing and portfolio moves introduced reporting volatility versus organic performance.
Read all updates
Q1-2026 Updates
Positive
Negative
Q1 Results Ahead of Plan and Expectations
Reported Q1 sales of $2.0 billion with organic sales growth of +2.1% and adjusted EPS of $1.48 (+11% YoY), both ahead of plan and Street expectations; company reiterated full-year organic sales and free cash flow guidance and now expects EPS toward the high end of $6.40–$6.60.
Read all positive updates
Company Guidance
Management reiterated full‑year guidance while flagging key phasing and headwinds: they expect EPS toward the high end of the $6.40–$6.60 range, are targeting operating margin of 21.0%–21.5% (up 50–100 bps year‑over‑year), and are maintaining free cash flow guidance; they continue to assume tariffs of $100–$120 million and a ~100 bp FX tailwind to sales. They disclosed a Q2 ERP timing benefit of over $100 million of sales that will reverse mostly in Q3, and noted SKU rationalization (~100 bp drag in Q1, >50% complete, finishing by year‑end) and a $500 million Transform for the Future savings program. First‑quarter anchors included $2.0 billion sales (+2.1% organic, -3% reported), adjusted operating income $392 million (19.5% margin), gross margin 56.4% (+80 bps), EPS $1.48 (+11%), cash $561 million, net debt $4.5 billion, and they repurchased ~923,000 shares for $67 million with board authorization up to $1 billion; tax rate guidance remains 19.5%–20.5%, and the long‑range organic growth target remains 4%–5%.Solventum Corporation Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.26B | 8.32B | 8.25B | 8.20B | 8.13B | 8.17B |
| Gross Profit | 4.43B | 4.45B | 4.59B | 4.69B | 4.70B | 4.92B |
| EBITDA | 2.76B | 2.55B | 1.53B | 2.23B | 2.27B | 2.48B |
| Net Income | 1.43B | 1.56B | 479.00M | 1.35B | 1.34B | 1.46B |
Balance Sheet | ||||||
| Total Assets | 14.10B | 14.29B | 14.46B | 13.94B | 13.59B | 14.07B |
| Cash, Cash Equivalents and Short-Term Investments | 561.00M | 878.00M | 762.00M | 194.00M | 61.00M | 91.00M |
| Total Debt | 5.08B | 5.04B | 8.01B | 8.30B | 0.00 | 0.00 |
| Total Liabilities | 9.13B | 9.24B | 11.50B | 2.28B | 1.85B | 2.02B |
| Stockholders Equity | 4.97B | 5.05B | 2.96B | 11.67B | 11.74B | 12.06B |
Cash Flow | ||||||
| Free Cash Flow | -203.00M | -10.00M | 805.00M | 1.63B | 1.43B | 1.93B |
| Operating Cash Flow | 151.00M | 369.00M | 1.19B | 1.92B | 1.68B | 2.20B |
| Investing Cash Flow | 2.83B | 2.80B | -380.00M | -230.00M | -253.00M | -278.00M |
| Financing Cash Flow | -2.97B | -3.06B | -240.00M | -1.55B | -1.46B | -1.96B |
Solventum Corporation Technical Analysis
Positive
70.48
Price Trends
71.43
Positive
72.29
Positive
74.22
Positive
Market Momentum
2.53
Negative
68.51
Neutral
71.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOLV, the sentiment is Positive. The current price of 70.48 is below the 20-day moving average (MA) of 76.85, below the 50-day MA of 71.43, and below the 200-day MA of 74.22, indicating a bullish trend. The MACD of 2.53 indicates Negative momentum. The RSI at 68.51 is Neutral, neither overbought nor oversold. The STOCH value of 71.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOLV.
Solventum Corporation Risk Analysis
Solventum Corporation disclosed 42 risk factors in its most recent earnings report. Solventum Corporation 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
Solventum Corporation Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $10.34B | 16.97 | 25.35% | 0.65% | 10.05% | 23.59% | |
72 Outperform | $8.87B | 5.89 | 20.93% | 0.35% | 10.42% | 33.92% | |
70 Outperform | $12.72B | 17.09 | -133.12% | ― | 6.68% | 2.79% | |
68 Neutral | $14.33B | 8.48 | 40.55% | ― | 4.56% | 27.14% | |
65 Neutral | $14.28B | 10.03 | 30.71% | ― | -0.28% | 277.03% | |
63 Neutral | $11.84B | 11.25 | 7.16% | 3.29% | 7.24% | 67.43% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SOLV
Solventum Corporation
82.46
6.91
9.15%
DVA
DaVita
198.19
59.08
42.47%
FMS
Fresenius Medical Care
22.35
-5.51
-19.78%
EHC
Encompass Health
104.19
-14.25
-12.03%
THC
Tenet Healthcare
166.36
9.80
6.26%
UHS
Universal Health
146.59
-25.34
-14.74%
Solventum Corporation Corporate Events
Legal ProceedingsRegulatory Filings and Compliance
Solventum Resolves Bylaw Litigation and Case Closed
Negative
Jun 5, 2026
On May 10, 2024, a stockholder class action was filed in Delaware Chancery Court by plaintiff Eric Gilbert challenging aspects of Solventum Corporation’s advance notice and stockholder nomination bylaws. Solventum amended the contested bylaw...
Business Operations and StrategyExecutive/Board Changes
Solventum Adopts Updated Executive Severance and Compensation Plan
Neutral
May 27, 2026
On May 21, 2026, Solventum’s board Talent Committee approved a new Executive Severance Plan, effective June 1, 2026, that governs severance for certain eligible employees, including executive officers, following qualifying involuntary termin...
Executive/Board ChangesShareholder Meetings
Solventum Shareholders Back Board, Pay and Auditor Choices
Positive
May 20, 2026
Solventum Corporation held its annual shareholder meeting on May 15, 2026, where investors elected four Class II directors—Carlos Albán, Susan D. DeVore, Shirley Edwards and Dr. Bernard A. Harris Jr.—to new two-year terms by major...
Executive/Board Changes
Solventum Announces Planned Retirement of Chief Accounting Officer
Neutral
Mar 24, 2026
Solventum Corporation, a company that has not disclosed its specific industry or product focus in this notice, announced an upcoming leadership transition in its finance function.On March 20, 2026, Chief Accounting Officer Mary Wilcox informed the...
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.