Wall St futures flat amid US-China trade jitters; bank earnings in focus
Investing.com - JPMorgan has raised its price target on UL Solutions Inc (NYSE:ULS) to $70.00 from $64.00 while maintaining an Overweight rating, despite the stock dropping 11.5% following its second-quarter earnings report. According to InvestingPro data, the stock has declined 11.67% over the past week, though it maintains a robust 30.13% year-to-date gain.
UL Solutions reported second-quarter 2025 adjusted earnings per share of $0.52, slightly exceeding JPMorgan’s estimate of $0.49, primarily due to a lower tax rate. However, the company’s organic, constant currency revenue growth of 5.5% year-over-year fell short of the bank’s 6.2% projection, with growth missing estimates across all three divisions. InvestingPro data shows the company maintains impressive gross profit margins of 48.71%, though it trades at a relatively high P/E ratio of 45.09x.
The company maintained its 2025 guidance for mid-single-digit organic revenue growth and adjusted EBITDA margins of 24%. Despite the revenue growth shortfall, EBITDA margins before stock-based compensation exceeded expectations in the industrial and consumer divisions.
JPMorgan attributed the stock’s sharp decline to the step-down in organic growth following an outsized stock move after first-quarter results. The bank suggested UL Solutions has struggled to manage street expectations and could benefit from providing more specific organic growth outlooks in the volatile 2025 macroeconomic environment.
While JPMorgan is lowering its 2025 EPS estimates to account for slower second-half organic growth, the bank maintained that its long-term fundamental view of the company remains unchanged, expecting UL Solutions to continue delivering mid-single-digit growth and annual margin expansion. InvestingPro analysis indicates a GOOD overall financial health score, with multiple additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of UL Solutions among 1,400+ top US stocks.
In other recent news, UL Solutions reported its Q2 2025 earnings, surpassing expectations with an adjusted earnings per share (EPS) of $0.52, compared to the forecasted $0.46. The company’s revenue reached $776 million, marking a 6.3% increase from the previous year. Despite these positive earnings results, the stock experienced a decline due to broader market concerns discussed during the earnings call. Stifel has reiterated its Buy rating on UL Solutions, maintaining a price target of $77.00. The firm views the recent 10.6% stock decline as a buying opportunity, attributing the market reaction to investor expectations around tariffs. These developments provide a snapshot of UL Solutions’ current financial and market positioning.
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