Wednesday - Mizuho Securities has increased the price target for Element Solutions Inc (NYSE:ESI) shares to $29 from the previous $28 while maintaining a Buy rating on the stock.
The adjustment comes after the company provided an upbeat second-half EBITDA guidance of approximately $275 million, slightly above the Bloomberg consensus of $273 million. Additionally, Element Solutions' earnings per share (EPS) forecast for the same period is set at $0.74, surpassing the consensus estimate of $0.72.
The company has also raised its EBITDA guidance for the current quarter to around $135 million, up from the initial estimate of approximately $125 million. This revision is attributed to a stronger outlook for the electronic materials segment.
Element Solutions' CEO, Ben Gliklich, is scheduled to present at the Mizuho Technology Conference today, which could provide further insights into the company's strategy and market position.
In relation to the price target increase, the analyst's rationale includes an updated next twelve months plus one quarter (NTM+1) EPS, which is forecasted to rise to $1.70 from $1.65.
This estimate is based on an unchanged forward price-to-earnings multiple of approximately 17 times. The projection suggests that Element Solutions' valuation is approximately 0.85 times, compared to the S&P Materials sector's five-year median of around 0.8 times.
Element Solutions' improved financial guidance indicates a positive performance trajectory for the company, as reflected in the raised price target by Mizuho Securities. The firm's outlook on the stock remains positive with the continued Buy rating.
In other recent news, Element Solutions Inc has been making significant strides in its financial performance. The company posted robust results for the first quarter of 2024, with a 17% increase in its adjusted EBITDA on a constant currency basis compared to the previous year.
This was largely driven by substantial growth in its Electronics business. Despite a soft automotive demand in its Industrial and Specialty segment, the company improved profitability through lower raw material costs and strength in specific business areas.
In light of these developments, BMO Capital Markets adjusted its outlook on the company by raising its stock price target to $28 from the previous $27, while maintaining an Outperform rating.
The firm highlighted Element Solutions' impressive growth and high margins, particularly within its Electronics segment. It also expressed confidence in the company's long-term strategy, which includes achieving more than 10% annual EBITDA growth in its Electronics division.
These recent developments demonstrate Element Solutions' commitment to delivering on its management's long-term expectations and its potential for continued success in the market. The company's strategic positioning and conservative yet realistic financial guidance for the upcoming quarters are seen as strong indicators of its future performance.
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