Solventum Corporation (SOLV) AI Stock Analysis

• Market Cap: $12.55B
• Dividend Yield: N/A
• Average Volume (3M): 1.11M
• Price to Earnings (P/E): 33.3
• Beta (1Y): 0.64
• Revenue Growth: 2.46%
• EPS Growth: -64.37%
• Country: US
• Employees: 22,000
• Sector: General
• Sector Strength: N/A
• Industry: Medical - Care Facilities
• EPS (TTM): 1.69
• Shares Outstanding: 173,387,800
• 10 Day Avg. Volume: 901,546
• 30 Day Avg. Volume: 1,106,527
• 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: 1.64
• Enterprise Value/Revenue: 2.46
• Enterprise Value/Gross Profit: 4.51
• Enterprise Value/Ebitda: 16.15
• 1Y Price Target: $90.80
• Price Target Upside: 25.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 65 Neutral
• Price Target: $78.00 ▲(7.76% Upside)

Solventum Corporation's overall stock score is driven by a strong earnings call and positive corporate events, particularly the strategic sale of a business unit to reduce debt. However, financial performance is hindered by high leverage and declining profitability, while technical analysis and valuation present mixed signals.

Positive Factors

Financial Strategy

The divestiture of P&F is expected to bring in $3.4B of net proceeds while improving SOLV’s financial profile.

Market Performance

SOLV came off a strong quarter with 4.3% organic growth, encouraging analysts about the company's future performance.

Operational Strategy

Operational flexibility for SOLV is anticipated to improve significantly following internal restructuring and the $4.1 billion sale of P&F.

Negative Factors

Margin Pressure

Tariff impacts are pressuring margins with adjusted operating margins expected at the low end of their range.

Market Valuation

SOLV shares trade below large-cap MedTech peers which possess a better growth and margin profile.

Revenue Growth Visibility

There is limited visibility into a sustainable revenue growth turnaround, despite management's strategy to bridge the gap closer to market growth.

Solventum Corporation Business Overview & Revenue Model

Company Description

Solventum Corporation (SOLV) is a leading provider in the specialty chemicals sector, focusing on innovative solvent solutions for various industries, including pharmaceuticals, agriculture, and industrial manufacturing. The company specializes in developing high-performance solvents that enhance product efficiency and sustainability, catering to the growing demand for eco-friendly chemical alternatives. With a strong commitment to research and development, Solventum offers a diverse portfolio of products that meet the stringent regulatory standards of its global clientele.

How the Company Makes Money

Solventum Corporation generates revenue primarily through the sale of its specialty solvent products to a wide range of industries. Key revenue streams include direct sales to manufacturers in the pharmaceutical and agricultural sectors, as well as partnerships with distributors who extend the reach of its products. The company also engages in contract manufacturing and custom formulation services, which provide additional income by developing tailored solutions for specific customer needs. Significant partnerships with major players in the chemical and manufacturing industries enhance Solventum's market presence and contribute to its earnings by ensuring a steady demand for its innovative products.

Solventum Corporation Financial Statement Overview

Summary

Solventum Corporation shows strong revenue growth but faces challenges in profitability and leverage management. The income statement indicates robust expansion, yet declining margins suggest cost pressures. The balance sheet highlights increased financial risk due to high leverage, and cash flow metrics reveal weakening cash generation, which could affect liquidity.

Income Statement

Solventum Corporation's income statement shows a mixed performance. The TTM data indicates a strong revenue growth rate of 96.3%, which is a positive sign of expansion. However, the gross profit margin has decreased from previous years, indicating potential cost pressures. The net profit margin has also declined, suggesting reduced profitability. EBIT and EBITDA margins have decreased, reflecting operational challenges. Overall, while revenue growth is robust, profitability metrics have weakened.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.14 in the TTM, indicating significant leverage and potential financial risk. The return on equity has decreased, reflecting lower profitability relative to equity. The equity ratio has also declined, suggesting a higher reliance on debt financing. While the company has a solid asset base, the increasing leverage poses a risk to financial stability.

Cash Flow

Cash flow analysis shows a concerning trend with a significant decline in free cash flow growth, down by 61.8% in the TTM. The operating cash flow to net income ratio has decreased, indicating less cash generation relative to net income. The free cash flow to net income ratio has also declined, suggesting reduced cash efficiency. Overall, the cash flow position is weakening, which could impact future liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.39B	8.25B	8.20B	8.13B	8.17B
Gross Profit	4.57B	4.59B	4.69B	4.70B	4.92B
EBITDA	1.28B	1.53B	2.23B	2.27B	2.48B
Net Income	380.00M	479.00M	1.35B	1.34B	1.46B
Balance Sheet
Total Assets	15.07B	14.46B	14.38B	13.59B	14.07B
Cash, Cash Equivalents and Short-Term Investments	492.00M	762.00M	600.00M	61.00M	91.00M
Total Debt	7.82B	8.01B	98.00M	95.00M	112.00M
Total Liabilities	11.43B	11.50B	10.97B	1.85B	2.02B
Stockholders Equity	3.65B	2.96B	3.41B	11.74B	12.06B
Cash Flow
Free Cash Flow	147.00M	805.00M	1.63B	1.43B	1.93B
Operating Cash Flow	586.00M	1.19B	1.92B	1.68B	2.20B
Investing Cash Flow	-444.00M	-380.00M	-230.00M	-253.00M	-278.00M
Financing Cash Flow	-555.00M	-240.00M	-1.55B	-1.46B	-1.96B

Solventum Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 72.38
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 72.38 is below the 20-day moving average (MA) of 72.52, below the 50-day MA of 73.52, and above the 200-day MA of 72.23, indicating a neutral trend. The MACD of -0.22 indicates Negative momentum. The RSI at 50.14 is Neutral, neither overbought nor oversold. The STOCH value of 49.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOLV.

Solventum Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UHS	78 Outperform	$11.81B	9.78	18.66%	0.43%	9.61%	39.65%
THC	75 Outperform	$17.01B	12.32	41.09%	―	-1.09%	-43.10%
EHC	73 Outperform	$12.54B	24.17	25.35%	0.54%	11.80%	30.02%
FMS	71 Outperform	$14.28B	19.85	4.72%	3.24%	1.11%	25.84%
SOLV	65 Neutral	$12.55B	33.34	11.64%	―	2.46%	-64.37%
DVA	62 Neutral	$9.69B	13.32	635.30%	―	5.09%	7.85%
Sector *	55 Neutral	$6.29B	4.66	-20.95%	6.01%	10.84%	8.15%

Solventum Corporation Corporate Events

Solventum Sells Purification Business to Thermo Fisher

Solventum Corporation completed the sale of its Purification & Filtration business to Thermo Fisher Scientific Inc. for $4.0 billion in cash on September 1, 2025. This transaction is a significant step in Solventum’s transformation plan, allowing the company to reduce debt and strengthen its balance sheet, while also updating its financial guidance for 2025 to reflect the divestiture’s impact.

Solventum Corporation Initiates $1.75 Billion Tender Offers

On August 22, 2025, Solventum Corporation announced the initiation of cash tender offers to purchase its outstanding notes for up to $1.75 billion. The tender offers include various senior notes with different maturity dates, with a significant portion allocated to notes due in 2027. This move is part of Solventum’s strategic financial management, potentially impacting its debt structure and offering stakeholders an opportunity to tender their notes under specified conditions.

Solventum Announces Secondary Offering Pricing

On August 13, 2025, Solventum Corporation announced the pricing of a secondary offering of 8,800,000 shares of its common stock, which was sold by 3M Company, the selling shareholder. The offering, underwritten by Goldman Sachs & Co. LLC and BofA Securities, Inc., is expected to generate approximately $648 million in gross proceeds for 3M Company, with Solventum not receiving any proceeds from the sale. The transaction was registered under the Securities Act of 1933 and is expected to close on August 15, 2025, subject to customary conditions.

Solventum Amends Acquisition Deal with Thermo Fisher

On June 25, 2025, Solventum Corporation and Thermo Fisher Scientific Inc. amended their transaction agreement to exclude Solventum’s drinking water filtration business from the acquisition, reducing the purchase price to approximately $4.00 billion. This amendment is expected to simplify the transaction and potentially accelerate its completion by the end of 2025, while retaining the Water Business could enhance Solventum’s earnings per share but may impact projected margin improvements.