RBC Capital cuts Chemours stock target to $17, keeps Outperform

On Wednesday, RBC Capital Markets adjusted their financial outlook for Chemours Company (NYSE:CC), reducing the price target from $25.00 to $17.00, but maintained an Outperform rating on the stock. The adjustment came as a response to several market factors impacting the company's performance. The stock currently trades at $9.73, near its 52-week low of $9.47, having declined 64% over the past year. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value model.

The firm cited ongoing demand weakness and the recent implementation of tariffs on April 2 as key reasons for the revised estimates. These tariffs are expected to trigger retaliatory measures that could further affect the company's financials. Despite these challenges, RBC Capital still regards Chemours as their top pick within the sector. InvestingPro data shows the company maintains a significant 10.44% dividend yield, though it operates with a substantial debt burden, as evidenced by its debt-to-equity ratio of 7.21x.

Analysts at RBC Capital forecast a margin expansion for Chemours' Titanium Dioxide (TiO2) in the fiscal year 2025, albeit with moderated price expectations. Year-over-year improvements in the Thermal & Specialized Solutions (TSS) segment are anticipated due to the Opteon product line, though this is somewhat tempered by headwinds in Freon pricing and anticipated outcomes from the Advanced Performance Materials (APM) segment's new capacity.

The financial projections for Chemours have been revised, with a lower expected EBITDA for the first quarter and full fiscal year 2025, now set at $160 million and $825 million respectively, down from the previous forecast of $170 million and $900 million. The price target adjustment to $17.00 is based on a consistent valuation multiple of 7.0 times the projected fiscal year 2025 EBITDA and a net leverage multiple of 4.0 times, which remains unchanged from the previous leverage multiple of 3.0 times. The stock currently trades at a P/E ratio of 16.47x, which InvestingPro analysis suggests is low relative to near-term earnings growth potential.

In other recent news, Chemours Company has been the focus of several analyst reviews and company announcements. Mizuho (NYSE:MFG) Securities upgraded Chemours' stock rating from 'Neutral' to 'Outperform', citing positive developments such as the normalization of Freon-related inventories and stabilization in specialty plastics. The firm set a price target of $19.00 for Chemours shares. Meanwhile, Jefferies adjusted its price target for the company to $20, maintaining a 'Hold' rating, following a fourth-quarter EBITDA report of $179 million, which surpassed estimates.

Chemours has also provided guidance for FY25 adjusted EBITDA at a midpoint of $900 million, which fell short of consensus estimates. This led Mizuho to revise its price target down from $21.00 to $19.00, while keeping a 'Neutral' rating. Additionally, Chemours announced that board member Guillaume Pepy will not seek re-election at the 2025 Annual Meeting of Shareholders, a decision not linked to any company disagreements.

The company continues to face challenges in transitioning from Freon to its next-generation Opteon refrigerants, affecting its Thermal & Specialized Solutions segment. Weakness in the semiconductor wafer fabrication equipment and hydrogen electrolyzers markets has impacted demand for Chemours' fluoropolymers. Despite these challenges, analysts note potential growth in the European titanium dioxide market and construction demand in the coming years.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.