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On Friday, JPMorgan analyst Jeffrey Zekauskas upgraded shares of TRONOX (NYSE: NYSE:TROX), a global mining and inorganic chemicals company, from Neutral to Overweight. Additionally, the firm increased the price target for the stock from $5.00 to $7.00. The upgrade comes with a positive outlook on several factors that could contribute to the company’s value growth. According to InvestingPro data, while TROX operates with a significant debt burden, its current ratio of 2.28 indicates strong short-term liquidity, with liquid assets exceeding short-term obligations.
Zekauskas pointed out that the value of commodity companies often increases due to a combination of rising commodity prices, improved supply/demand balance, and a shift in macro sentiment. For Tronox, these elements appear to be aligning favorably. Specifically, the analyst suggested that titanium dioxide (TiO2) prices are expected to rise in either the second or third quarter of 2025, following a two-year decline.
Tronox’s market value has decreased by 74% over the past year, underperforming a market that has risen by 12%. The stock currently trades at $5.10, significantly below its 52-week high of $20.70, though it has shown signs of recovery with a 7.6% gain over the past week. JPMorgan sees potential volume opportunities for Tronox, especially since around 400,000 tons of product annually have been shipped by China into the Indian and Brazilian markets, where tariffs of over $500 per ton have been partly or fully implemented. InvestingPro subscribers have access to 12 additional key insights about TROX’s market position and growth potential.
The less pessimistic outlook on tariff implementation by the U.S. also contributes to the improved sentiment. JPMorgan’s December 2025 price target of $7 reflects a 40% upside and is based on an estimated 6.5 times multiple of Tronox’s EBITDA of $488 million. The company maintains a notable dividend yield of 9.8% and has consistently paid dividends for 14 consecutive years, despite current market challenges. The free cash flow yield for 2026 is projected to be 13%. The company’s current leverage is noted at 5 times, with a debt-to-equity ratio of 1.85. For a comprehensive analysis of TROX’s financial health and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro.
Zekauskas’s commentary emphasizes the potential for TiO2 price increases and market opportunities that could benefit Tronox in the near future, alongside a general market shift towards a less pessimistic view on U.S. tariff implementations. The raised price target and upgraded rating reflect a confidence in the company’s ability to capitalize on these factors.
In other recent news, Tronox Holdings PLC reported a net loss of $111 million for the first quarter of 2025, with earnings per share (EPS) of -$0.15, missing the forecasted $0.02. The company’s revenue for the quarter was $738 million, falling short of the expected $751.59 million. Tronox aims for significant cost improvements by the end of 2026 and anticipates a stronger performance in the second half of 2025. BMO Capital Markets downgraded Tronox’s stock rating from Outperform to Market Perform, reducing the price target from $13.00 to $7.00. The downgrade was influenced by the company’s high-cost inventories and less favorable outlook for the second quarter. Tronox has provided revenue guidance for 2025 in the range of $3.0 to $3.4 billion, with an adjusted EBITDA target of $525 to $625 million. The company expects to see benefits from antidumping duties in Europe, India, and Brazil. Tronox’s strategic initiatives include idling its Batlik pigment plant in the Netherlands to improve operational efficiency.
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