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On Monday, Jefferies analysts upgraded Quaker Chemical (NYSE:KWR) Corporation stock (NYSE: KWR) from Hold to Buy. The firm also raised its price target to $146 from $115, reflecting a positive outlook on the company’s performance. According to InvestingPro data, the stock currently trades at an EV/EBITDA of 9x, with analysts’ consensus price targets ranging from $115 to $165.
Jefferies analysts highlighted Quaker Chemical’s solid margins and return on capital employed (ROCE), which remain above 2019 levels despite challenges in end-markets. They noted a significant reduction in the company’s EV/EBITDA over four years, which has led to share prices comparable to when earnings per share were below $5. The company maintains strong financial health with a current ratio of 2.45x and has maintained dividend payments for 53 consecutive years, raising them for the past 17 years straight.
The analysts described Quaker Chemical as a "good quality-at-a-reasonable-price candidate," citing a 7% free cash flow yield. They anticipate that earnings will likely improve in 2026, drawing attention to the company’s competitive advantage and cyclical leverage, where a 1% volume increase could add approximately 4% to earnings per share. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.
Jefferies sees potential for Quaker Chemical’s stock to rerate to match quality compounder peers, which could imply a value of $245 in 2027. In an optimistic scenario, the analysts suggest the stock might triple by 2030.
In other recent news, Quaker Chemical Corporation reported its Q1 2025 earnings, revealing a slight miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $1.58, which was below the forecasted $1.61, and revenue of $442.9 million, falling short of the expected $455.58 million. Despite the earnings miss, Quaker Chemical has implemented a $20 million cost-saving program and is focusing on strategic acquisitions to drive growth. The company recently acquired Dipsol Chemicals, which is expected to enhance its market presence and expand its addressable market. In another development, Quaker Chemical announced the retirement of Mr. Ramaswami Seshasayee from its Board of Directors, effective May 14, 2025, reducing the board size from twelve to eleven directors. The company has not indicated any immediate plans to replace Mr. Seshasayee or expand the board. Analysts from firms such as Seaport Research Partners and Jefferies have been closely monitoring these developments, noting the company’s strategic initiatives and market challenges. Quaker Chemical continues to focus on cost management and strategic investments to maintain a competitive edge in a challenging market environment.
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