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TRONOX Ltd (TROX)
NYSE:TROX
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TRONOX
(NYSE:TROX)
Rating:56Neutral
Price Target:
$5.50
▼(-1.08%Downside)
Positive Factors
Growth Potential
Analyst upgrades Tronox to Overweight from Neutral, reflecting a belief in the company's potential for growth and recovery.
Market Share Gains
Tronox is expected to benefit from tariffs placed on Chinese titanium dioxide exports, potentially leading to market share gains and price improvements.
Negative Factors
High-Cost Challenges
Concerns are elevated for 2Q as high mining costs and high-cost Botlek inventory are expected to affect profitability.
Macroeconomic Environment
The company faces a significant challenge with a steep necessary jump in earnings for the second half of the year amidst a tough macroeconomic environment.
TRONOX (TROX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$917.50M
Dividend Yield8.99%
Average Volume (3M)3.32M
Price to Earnings (P/E)―
Beta (1Y)1.98
Revenue Growth4.15%
EPS Growth57.25%
CountryUS
Employees6,500
SectorBasic Materials
Sector Strength66
IndustryChemicals
Share Statistics
EPS (TTM)-0.15
Shares Outstanding158,462,500
10 Day Avg. Volume3,069,563
30 Day Avg. Volume3,321,975
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)0.90
Price to Sales (P/S)0.00
P/FCF Ratio12.49
Enterprise Value/Market Cap5.04
Enterprise Value/Revenue0.38
Enterprise Value/Gross Profit9.68
Enterprise Value/Ebitda2.34
Forecast
1Y Price Target
$8.75Price Target Upside57.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
TRONOX Business Overview & Revenue Model
Company DescriptionTronox Holdings plc operates as a vertically integrated manufacturer of TiO2 pigment in North America, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates titanium-bearing mineral sand mines; and engages in beneficiation and smelting operations. It offers TiO2 pigment; ultrafine specialty TiO2; zircon; feedstock; pig iron; titanium tetrachloride; and other products. The company's products are used for the manufacture of paints, coatings, plastics, and paper, as well as various other applications. Tronox Holdings plc is based in Stamford, Connecticut.
How the Company Makes MoneyTronox generates revenue primarily through the sale of titanium dioxide (TiO2) pigment, which is used in a variety of applications including paints, coatings, plastics, and paper. The company operates an integrated value chain, from mining raw materials to producing finished pigment products, which allows it to control costs and ensure product quality. In addition to TiO2, Tronox also earns income from the sale of zircon, a mineral used in ceramics and refractory materials. Key revenue streams include direct sales to industrial customers and long-term contractual partnerships with major manufacturers. The company's profitability is influenced by factors such as raw material prices, energy costs, and global demand for its products. Strategic acquisitions and partnerships further bolster its market presence and contribute to its earnings.
TRONOX Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: 5.30%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with notable achievements in TiO2 demand growth and a strong cost improvement plan. However, these are balanced by significant challenges including a net loss, decline in zircon revenues, and high production costs. The company's strategic actions and cost reductions are promising, but the financial setbacks and market challenges temper the overall outlook.Q1-2025 Updates
Positive Updates
Stronger Than Normal TiO2 Demand
The company realized a 12% increase in TiO2 volumes from Q4 2024 to Q1 2025, with Europe leading sequential growth due to antidumping duties.
Sequential Revenue Growth
Revenue increased by 9% sequentially to $738 million, primarily driven by higher TiO2 sales volumes.
Cost Improvement Program
The company expects to deliver $125 million to $175 million in sustainable run rate cost improvements by the end of 2026, with a focus on operational excellence and technology.
Progress on Mining Projects
The expansion at Fairbreeze and East OFS is expected to be completed in 2025, with the commissioning of Fairbreeze in July and East OFS in November leading to cost improvements from 2026 onward.
Negative Updates
Net Loss in the Quarter
The company reported a net loss of $111 million, including $87 million of restructuring and other charges, primarily non-cash costs related to the idling of Botlek.
Decline in Zircon Revenues
Zircon revenues decreased 22% compared to the prior year, driven by a 15% decrease in sales volume and a 7% decrease due to price including mix.
Higher Production Costs
Production costs in the first quarter were higher than expected, primarily due to lower operating rates and increases in direct material prices.
Free Cash Flow Usage
The company reported a use of $142 million in free cash flow, including $110 million of capital expenditures.
Debt Levels and Leverage
Total debt was $3 billion with a net debt of $2.8 billion, and the net leverage ratio stood at 5.2 times on a trailing twelve-month basis.
Company Guidance
In the Q1 2025 earnings call, Tronox Holdings plc provided guidance on various metrics, indicating a mixed financial performance with strategic actions to mitigate challenges. The company reported a 9% sequential increase in revenue to $738 million, driven by a 12% uplift in TiO2 volumes, particularly in Europe due to antidumping duties. However, they faced a $61 million loss from operations and a net loss of $111 million, including $87 million in restructuring charges mainly from idling the Botlek plant. Adjusted EBITDA was $112 million, with a margin of 15.2%. Despite these hurdles, Tronox maintained its full-year guidance, projecting revenue between $3 billion and $3.4 billion and adjusted EBITDA in the range of $525 million to $625 million. They anticipate stronger performance in the second half of the year, with operational efficiencies and strategic measures expected to yield $125 million to $175 million in cost improvements by 2026. Additionally, the company targets a free cash flow of at least $50 million for 2025, supported by reduced capital expenditures and effective working capital management.TRONOX Financial Statement Overview
Summary
TROX's financial performance is challenged by declining revenue and negative profitability. Although there is positive cash flow growth, high leverage and a negative net profit margin underscore significant financial risks.Income Statement
TROX's income statement shows a decline in revenue over the TTM (Trailing-Twelve-Months) period, with a gross profit margin of 16.47% and a negative net profit margin of -1.70%. The revenue decreased by 25.16% compared to the previous year (2024), reflecting a challenging market environment. EBIT and EBITDA margins are moderate at 7.73% and 18.25%, respectively, indicating reasonable operational efficiency but insufficient to offset net losses.45
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 1.76, suggesting significant leverage. However, the equity ratio stands at 27.58%, providing some stability amidst the liabilities. Return on equity is negative due to losses, highlighting profitability challenges.50
Neutral
Cash Flow
Cash flow analysis indicates a positive free cash flow growth rate, shifting from negative to positive over the TTM. The operating cash flow to net income ratio is robust, demonstrating strong cash generation relative to net losses. However, the free cash flow to net income ratio is constrained by capital expenditures.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.04B | 3.07B | 2.85B | 3.45B | 3.57B | 2.76B | Gross Profit |
| 478.00M | 515.00M | 462.00M | 832.00M | 895.00M | 621.00M | EBIT |
| 117.00M | 219.00M | 186.00M | 458.00M | 577.00M | 271.00M | EBITDA |
| 427.00M | 525.00M | 458.00M | 714.00M | 840.00M | 619.00M | Net Income Common Stockholders |
| -39.11M | -48.00M | -316.00M | 497.00M | 286.00M | 969.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 138.00K | 151.00M | 273.00M | 164.00M | 228.00M | 619.00M | Total Assets |
| 6.07B | 6.04B | 6.13B | 6.31B | 5.99B | 6.57B | Total Debt |
| 3.10B | 2.99B | 2.95B | 2.67B | 2.66B | 3.40B | Net Debt |
| 2.96B | 2.84B | 2.68B | 2.50B | 2.43B | 2.78B | Total Liabilities |
| 4.36B | 4.25B | 4.15B | 3.90B | 3.94B | 4.70B | Stockholders Equity |
| 1.67B | 1.76B | 1.94B | 2.36B | 1.99B | 1.70B |
| Cash Flow | Free Cash Flow | ||||
| -109.00M | -70.00M | -77.00M | 170.00M | 468.00M | 160.00M | Operating Cash Flow |
| 327.00M | 300.00M | 184.00M | 598.00M | 740.00M | 355.00M | Investing Cash Flow |
| -362.00M | -343.00M | -255.00M | -415.00M | -269.00M | -229.00M | Financing Cash Flow |
| 51.00M | -71.00M | 176.00M | -250.00M | -877.00M | 214.00M |
TRONOX Technical Analysis
Negative
5.56
Price Trends
5.32
Positive
6.67
Negative
9.10
Negative
Market Momentum
0.13
Negative
50.01
Neutral
55.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TROX, the sentiment is Negative. The current price of 5.56 is above the 20-day moving average (MA) of 5.45, above the 50-day MA of 5.32, and below the 200-day MA of 9.10, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 50.01 is Neutral, neither overbought nor oversold. The STOCH value of 55.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TROX.
TRONOX Risk Analysis
TRONOX disclosed 40 risk factors in its most recent earnings report. TRONOX 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 2 New Risks
1.
Although certain jurisdictions have imposed anti-dumping duties or similar duties against TiO2 imports from China, there can be no assurance that such duties will benefit our business, and if such duties are reduced, removed or not extended, it could have a material adverse effect on our results of operations and financial position. Q4, 2024
2.
We may be subject to claims that arise from activities prior to our emergence from bankruptcy in 2011. Q4, 2024
TRONOX Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $656.37M | 7.69 | 11.26% | 2.67% | 6.03% | 5079.05% | |
72 Outperform | $783.71M | 14.84 | 10.22% | 8.52% | -6.76% | -3.19% | |
65 Neutral | $21.14B | 74.73 | 1.60% | 9.36% | -2.08% | -76.11% | |
56 Neutral | $5.98B | 6.84 | -26.94% | 0.22% | -5.98% | -183.27% | |
56 Neutral | $917.50M | ― | -8.44% | 8.99% | 4.15% | 57.25% | |
54 Neutral | $2.05B | ― | -4.46% | 8.48% | 0.02% | -43.65% | |
51 Neutral | $2.03B | -1.27 | -21.09% | 3.98% | 2.91% | -30.50% |
* Basic Materials Sector Average
Performance Comparison
TROX
TRONOX
5.56
-12.47
-69.16%
CE
Celanese
54.63
-83.08
-60.33%
HUN
Huntsman
10.90
-10.98
-50.18%
WLKP
Westlake Chemical PRN
22.12
1.68
8.22%
ASIX
AdvanSix
23.99
1.40
6.20%
DOW
Dow Inc
29.90
-21.50
-41.83%
TRONOX Corporate Events
Executive/Board ChangesShareholder Meetings
Tronox Shareholders Approve Key Governance Proposals
Positive
May 9, 2025
On May 7, 2025, Tronox Holdings plc held its Annual General Meeting of Shareholders, where key decisions were made regarding the company’s governance and financial practices. Shareholders voted on several proposals, including the election of directors, approval of executive compensation, and the appointment of auditors. The meeting underscored strong shareholder support for the company’s current leadership and strategic direction, with most proposals receiving overwhelming approval. These decisions are likely to reinforce Tronox’s operational stability and enhance its industry positioning.
Dividends
Tronox Declares Quarterly Dividend for Shareholders
Positive
May 7, 2025
On May 7, 2025, Tronox Holdings plc announced that its Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on July 2, 2025, to shareholders recorded by May 19, 2025. This announcement underscores Tronox’s commitment to returning value to its shareholders and may enhance its attractiveness to investors, reinforcing its position as a leading player in the titanium dioxide market.
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.