BWS maintains buy on Ecovyst stock, reiterates $12 price target

On Monday, Ecovyst Inc. (NYSE:ECVT), currently trading at $6.56 with a market cap of $768 million, maintained its Buy rating and $12.00 price target from BWS Financial following the release of the company’s first-quarter results. The report highlighted contract renewals that led to higher selling prices as a key factor for the period. Ecovyst experienced an increase in adjusted EBITDA to $180.5 million, surpassing estimates due to improved pricing which helped to mitigate the impact of lower sales. According to InvestingPro, the company shows strong recent momentum with a 14.4% return over the past week.

Ecovyst’s sales for the quarter were reported at $162.2 million, which fell short of the $172.9 million anticipated by BWS Financial. The shortfall in sales was attributed to lower than expected performance in the ecoservices segment. Despite this, InvestingPro analysis indicates the company maintains a "GOOD" overall financial health score, with particularly strong metrics in relative value and cash flow. A resurgence in the advanced materials segment was noted as a positive development, contributing to the company’s ability to exceed the adjusted EBITDA estimate provided by BWS Financial.

The increase in turnaround activity within the industry has led to higher sulfur prices, a cost that Ecovyst passes through. Despite this challenge, the company has raised its sales forecast for the full year by $30 million. Nevertheless, Ecovyst’s profit metrics have remained unchanged.

BWS Financial’s analysis indicates that their estimates for Ecovyst remain mostly unchanged. The firm anticipates that Ecovyst’s stock is poised to recover a significant portion of the losses it has incurred this year. The analyst’s commentary underscores a positive outlook for Ecovyst’s financial recovery and stock performance moving forward.

In other recent news, Ecovyst Inc. reported its first-quarter 2025 earnings, highlighting a 9% increase in total sales, reaching $200 million. The company’s adjusted EBITDA for the quarter stood at $39 million, driven by favorable sales timing within the Zeolyst joint venture. Ecovyst’s Eco Services segment saw sales rise by 1%, although adjusted EBITDA decreased due to higher manufacturing costs and turnaround activities. The Advanced Materials and Catalysts segment reported mixed results, with sales of Advanced Silicas remaining flat but the Zeolyst joint venture sales surging by 60%.

Ecovyst announced plans to acquire Cornerstone Chemical Company’s sulfuric acid assets in the second quarter, aiming to enhance its Gulf Coast network. This acquisition is expected to provide incremental sales and contribution margin, although significant earnings from this acquisition are not anticipated until 2026. The company’s strategic focus on share repurchases continues, with up to $30 million allocated for this purpose in the second quarter. Ecovyst remains confident in its cash generation capabilities, which support its current debt structure and leverage profile.

Analysts from firms like BMO Capital Markets and Citi have engaged with Ecovyst’s management, seeking clarity on various operational aspects, including the impact of tariffs and the structural price environment for sulfuric acid. The company has expressed optimism about its ability to navigate the current economic landscape, maintaining its guidance for full-year 2025 adjusted EBITDA, despite potential challenges from tariffs and macroeconomic conditions.

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