Asia tech stocks slide tracking Wall St losses amid AI doubts, govt. uncertainty
On Friday, Stifel analysts increased the price target for UL Solutions Inc (NYSE: ULS) to $77.00 from the previous $59.00, while reiterating a Buy rating on the stock. Currently trading at $69.96, the stock has seen impressive momentum with a 94.8% return over the past year. The adjustment followed UL Solutions’ first-quarter earnings report for 2025, which prompted a re-evaluation of the company’s financial model. InvestingPro data shows that 4 analysts have recently revised their earnings estimates upward for the upcoming period.
The analysts noted a potential decrease in Consumer segment revenue for the second quarter of 2025, taking into account possible tariff advancements into the first quarter as suggested by the company’s management. However, the exact impact of these tariff pull-forwards on the first quarter’s performance remains uncertain. The company maintains impressive gross profit margins of 48.7% and has demonstrated solid revenue growth of 6.8% in the last twelve months.
Despite this, Stifel continues to support a bullish stance on UL Solutions, citing the company’s consistent revenue growth across economic cycles and successful margin improvements. The new price target of $77 is based on an 18.2 times enterprise value to estimated 2026 EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs) multiple.
Stifel’s confidence in UL Solutions is further bolstered by the company’s unique position in the market as the only U.S.-listed Testing, Inspection, and Certification (TIC) service provider. This scarcity, combined with the company’s historical growth and margin efforts that are now yielding results, is expected to sustain a high valuation multiple as the company moves towards 2026.
In other recent news, UL Solutions Inc. reported its first-quarter 2025 earnings, surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $0.37, above the forecasted $0.30. The company experienced a 5.2% increase in consolidated revenue, reaching $705 million. UL Solutions reaffirmed its full-year 2025 outlook, projecting mid-single-digit organic revenue growth and an improved adjusted EBITDA margin of approximately 24%. The company continues to invest in expanding its testing facilities and enhancing its software solutions, which are expected to drive future growth. Analysts from Jefferies and Goldman Sachs noted UL Solutions’ resilience amidst macroeconomic uncertainties and its strong business model. Additionally, the company highlighted ongoing strategic M&A conversations, aiming to strengthen its position in key markets. Despite potential risks such as supply chain disruptions and regulatory changes, UL Solutions remains committed to its strategic initiatives.
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