Sika (SXYAY) AI Stock Analysis

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Sika

(OTC:SXYAY)

Rating:70Outperform

Price Target:

$27.00

▲(16.28% Upside)

Sika's overall performance is solid, driven by robust financial health and strategic growth initiatives. However, technical indicators suggest bearish momentum, and valuation metrics indicate potential overvaluation. The earnings call provided a balanced view with notable strengths and ongoing challenges.

Sika (SXYAY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$37.15B

Dividend Yield1.8%

Average Volume (3M)20.28K

Price to Earnings (P/E)26.4

Beta (1Y)0.92

Revenue Growth1.27%

EPS GrowthN/A

CountryUS

Employees33,511

SectorBasic Materials

Sector Strength73

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)0.43

Shares Outstanding1,604,793,000

10 Day Avg. Volume32,967

30 Day Avg. Volume20,278

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.36

Enterprise Value/Revenue4.30

Enterprise Value/Gross Profit7.88

Enterprise Value/Ebitda21.94

Forecast

1Y Price Target

$32.15

Price Target Upside38.46% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Sika Business Overview & Revenue Model

Company DescriptionSika AG, a specialty chemicals company, develops, produces, and sells systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and automotive industry worldwide. It offers tile adhesives and grouts, and systems for under-tile waterproofing and sound reduction, as well as renders and decorative finishes for exterior and interior walls; and develops and markets various admixtures and additives for use in concrete, cement, and mortar production, as well as flat roofing systems. The company also provides a range of technologies used for below and aboveground waterproofing, including flexible membrane systems, liquid applied membranes, joint waterproofing systems, waterproofing mortars and mortar admixtures, and injection resins and grouts for use in various markets, such as commercial and residential basements, tunnels, bridges, and various types of water-retaining structures, such as reservoirs, storage basins, and storage tanks. Further, it offers flooring solutions, such as synthetic resin and cementitious systems for industrial and commercial buildings; and sealants, tapes, spray foams, and elastic adhesives for the building envelope, interior finishing, and infrastructure construction applications. In addition, the company provides repair, strengthening, and protective solutions for concrete structures, such as repair mortars, shrinking grouts, anchoring adhesives, protective coatings, and corrosion control and structural strengthening systems. It serves automobile and commercial vehicle assembly, automotive aftermarket, marine vessel, industrial lamination, renewable energy, and facade engineering industries. The company was founded in 1910 and is headquartered in Baar, Switzerland.

How the Company Makes MoneySika makes money primarily through the sale of its high-performance construction and industrial products. The company's revenue model is built around the manufacturing and distribution of specialty chemicals and systems that enhance durability and sustainability in construction and industrial applications. Key revenue streams include sales from its construction business, which provides products such as concrete admixtures, waterproofing systems, roofing, and flooring solutions. Additionally, Sika generates substantial revenue from its industrial segment, which offers adhesive and sealant solutions, as well as systems for automotive and transportation markets. The company's global reach, extensive distribution network, and strategic acquisitions also play a significant role in driving its earnings.

Sika Earnings Call Summary

Earnings Call Date:Jul 30, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Feb 20, 2026

Earnings Call Sentiment Neutral

The earnings call presented a balanced view with notable achievements like increased synergy targets and strong regional performance in EMEA and Americas. However, challenges such as adverse foreign exchange impacts and deflationary pressures in China were significant. The overall sentiment remains cautiously optimistic with an emphasis on strategic growth and efficiency improvements.

Q2-2025 Updates

Positive Updates

Strong EMEA and Americas Performance

EMEA region demonstrated consistent improvement with a 1.9% growth in constant currencies, and significant double-digit growth in Middle East and Africa. The Americas saw a 3.5% growth in local currencies, with Latin America showing positive growth momentum.

Increased Synergy Targets

MBCC synergy targets were increased by CHF 20 million for the ongoing year, contributing to an overall synergy expectation of CHF 200 million to CHF 220 million by 2026.

EBITDA Margin Improvement

EBITDA margin expanded by 20 basis points to 18.9%, driven by cost efficiencies and synergies.

Bolt-On Acquisitions

Closed 4 bolt-on acquisitions in roofing, building finishing, and expansion in Qatar, indicating a strong market consolidation strategy.

Improved Cost Control

Operating costs decreased over-proportionally, driven by MBCC synergies and operational efficiency measures.

Negative Updates

Adverse Foreign Exchange Impact

Foreign exchange effects reduced local currency growth by 4.3 percentage points, particularly affecting sales growth in Swiss francs.

Challenges in China

China faced deflationary market conditions, impacting growth negatively by -4.7% in the region, with a focus on protecting margins.

Mixed Performance in Americas

The U.S. market experienced mixed signals from trade policy, causing a slowdown in growth momentum.

Decline in Operating Free Cash Flow

Operating free cash flow was lower than the previous year, partially due to seasonal working capital increases and higher investments.

Company Guidance

In the first half of 2025, Sika reported a modest sales growth of 1.6% in local currency, with organic growth at 0.6%, despite challenging market conditions. The company's EBITDA margin improved by 20 basis points to 18.9%, driven by efficiencies and synergies, notably increasing their MBCC synergy targets by CHF 20 million for the ongoing year. Regional performance varied, with EMEA growing 1.9% at constant currencies and the Americas seeing 3.5% growth in local currencies. Asia Pacific experienced a decline of 4.7%, primarily due to the deflationary market environment in China. Adverse foreign exchange movements impacted sales growth by 4.3 percentage points. Sika closed four acquisitions, contributing to 1 percentage point of additional growth. Looking ahead, Sika is committed to outpacing the market and achieving an EBITDA margin between 19.5% and 19.8% for the full year, with a focus on sustainable and profitable growth as outlined in their Strategy '28.

Sika Financial Statement Overview

Summary

Sika demonstrates solid financial health with consistent revenue growth, strong profit margins, and effective cash flow generation. The balanced capital structure and efficient equity utilization position the company well in the competitive chemicals industry.

Income Statement

Very Positive

Sika has demonstrated consistent revenue growth, with a 4.67% increase from 2023 to 2024. The gross profit margin has remained strong at 54.54%. The net profit margin improved to 10.59%, indicating enhanced profitability. Both EBIT and EBITDA margins are robust at 14.57% and 19.59%, respectively, showcasing operational efficiency.

Balance Sheet

Positive

The debt-to-equity ratio is 0.81, reflecting a balanced capital structure. Return on equity stands at a healthy 17.72%, indicating effective use of equity financing. The equity ratio is 44.02%, which suggests a stable financial position with adequate equity backing.

Cash Flow

Positive

Sika's free cash flow grew marginally by 1.34% from 2023 to 2024, indicating steady cash generation. The operating cash flow to net income ratio is 1.40, and the free cash flow to net income ratio is 1.11, both signifying strong cash flow relative to net income, enhancing financial flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.76B	11.24B	10.49B	9.25B	7.88B
Gross Profit	6.42B	6.02B	5.18B	4.79B	4.31B
EBITDA	2.30B	2.00B	1.94B	1.76B	1.48B
Net Income	1.25B	1.06B	1.16B	1.05B	824.50M
Balance Sheet
Total Assets	15.98B	15.05B	11.32B	10.70B	9.79B
Cash, Cash Equivalents and Short-Term Investments	712.90M	648.20M	1.88B	1.18B	1.33B
Total Debt	5.72B	5.84B	3.89B	3.66B	4.14B
Total Liabilities	8.93B	9.12B	6.35B	6.30B	6.51B
Stockholders Equity	7.03B	5.92B	4.97B	4.39B	3.29B
Cash Flow
Free Cash Flow	1.38B	1.37B	833.80M	893.30M	1.24B
Operating Cash Flow	1.74B	1.65B	1.10B	1.06B	1.37B
Investing Cash Flow	-580.70M	-3.52B	-169.00M	-469.20M	-253.10M
Financing Cash Flow	-1.08B	694.90M	-190.00M	-736.80M	-769.00M

Sika Technical Analysis

Technical Analysis Sentiment

Negative

Last Price23.22

Price Trends

50DMA

24.93

Negative

100DMA

25.20

Negative

200DMA

25.19

Negative

Market Momentum

MACD

-0.42

Negative

RSI

38.64

Neutral

STOCH

8.76

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SXYAY, the sentiment is Negative. The current price of 23.22 is below the 20-day moving average (MA) of 23.52, below the 50-day MA of 24.93, and below the 200-day MA of 25.19, indicating a bearish trend. The MACD of -0.42 indicates Negative momentum. The RSI at 38.64 is Neutral, neither overbought nor oversold. The STOCH value of 8.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SXYAY.

Sika Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPM	78 Outperform	$16.08B	23.42	25.42%	1.63%	0.51%	17.21%
SHW	72 Outperform	$91.21B	36.33	62.43%	0.84%	0.31%	2.66%
SXYAY	70 Outperform	$37.15B	26.41	18.94%	1.80%	1.27%	―
EMN	69 Neutral	$8.08B	9.88	14.52%	4.69%	1.60%	-3.97%
DD	67 Neutral	$32.21B	40.24	0.31%	2.09%	4.55%	-130.25%
PPG	67 Neutral	$25.10B	19.72	16.88%	2.47%	-10.59%	-7.79%
Sector *	61 Neutral	$10.26B	6.13	0.71%	2.87%	3.45%	-36.02%

* Basic Materials Sector Average

Performance Comparison

SXYAY

Sika

22.54

-8.56

-27.52%

EMN

Eastman Chemical

69.42

-26.30

-27.48%

PPG

PPG Industries

111.23

-12.42

-10.04%

RPM

RPM International

122.84

9.58

8.46%

SHW

Sherwin-Williams Company

365.83

6.16

1.71%

DuPont de Nemours

76.92

-3.10

-3.87%

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.Date of analysis: Jul 30, 2025