Element Solutions (ESI) Earnings Preview: What to Expect on October 28th
Get ready for Element Solutions’ (ESI) upcoming quarterly earnings release on Monday, October 28th. Investors will be glued to their screens, eager to see if the company can deliver on analysts’ expectations of $0.39 in earnings per share (EPS). But the real story lies beyond just meeting estimates. Investors will be looking for signs of surpassing expectations and positive guidance for the next quarter, which could significantly influence the stock price.
A Quick Look at Element Solutions’ History
Last quarter, Element Solutions beat EPS by a slim margin of $0.01. However, this positive news wasn’t enough to prevent a 3.05% drop in the share price the following day. This highlights the importance of not just meeting expectations but exceeding them with strong guidance. Let’s take a closer look at Element Solutions’ past performance and its impact on stock prices:
| Quarter | EPS Estimate | EPS Actual | Price Change (%) |
|—|—|—|—|
| Q2 2024 | 0.35 | 0.36 | -3.0% |
| Q1 2024 | 0.32 | 0.34 | -4.0% |
| Q4 2023 | 0.33 | 0.32 | -2.0% |
| Q3 2023 | 0.33 | 0.36 | 4.0% |
Analyst Sentiment: Buy, Sell, or Hold?
Understanding market sentiment and expectations is crucial for any investor. For Element Solutions, the current consensus rating among analysts is ‘Buy’, based on 1 analyst rating. This suggests that analysts are generally optimistic about the company’s future prospects. Furthermore, the average one-year price target sits at $33.0, indicating a potential upside of 22.31%.
Peer Comparison: How Does Element Solutions Stack Up?
It’s always insightful to compare a company’s performance to its peers. Let’s look at how Element Solutions measures up against three prominent players in the industry: Arcadium Lithium, Balchem, and Axalta Coating Sys.
| Company | Consensus Rating | Average 1-Year Price Target | Potential Upside (%) |
|—|—|—|—|
| Element Solutions | Buy | $33.0 | 22.31% |
| Arcadium Lithium | Neutral | $4.83 | -82.1% |
| Balchem | Buy | $185.0 | 585.69% |
| Axalta Coating Sys | Outperform | $42.6 | 57.89% |
Key Takeaways from the Peer Analysis
Element Solutions stands out for its ‘Buy’ consensus rating, indicating a more positive outlook than its peers. However, its potential upside is less dramatic than Balchem and Axalta Coating Sys. This suggests that while analysts see growth potential for Element Solutions, it may be more measured than some of its competitors.
A Deeper Dive into Element Solutions’ Financials
Market Capitalization:
Element Solutions’ market capitalization falls below industry averages, indicating a relatively smaller size compared to its peers. This could be attributed to factors such as perceived growth potential or operational scale.Revenue Growth:
The company boasts a positive revenue growth rate of 4.54% as of June 30, 2024, indicating a substantial increase in top-line earnings. However, this growth rate lags behind the industry average for the Materials sector.Net Margin:
Element Solutions’ net margin exceeds industry standards, highlighting the company’s exceptional financial performance. With an impressive 15.21% net margin, the company demonstrates efficient cost management and strong profitability.Return on Equity (ROE):
Element Solutions’ ROE surpasses industry averages, showcasing its effective use of equity capital and strong financial performance. The company boasts a 3.97% ROE.Return on Assets (ROA):
Element Solutions’ ROA also excels beyond industry benchmarks, reaching 1.88%. This signifies efficient asset management and strong financial health.Debt Management:
Element Solutions’ debt-to-equity ratio is below the industry average, at 0.81, reflecting a lower dependency on debt financing and a more conservative financial approach.What to Watch for on October 28th
Investors will be eager to hear Element Solutions’ guidance for the next quarter, particularly regarding revenue growth and EPS estimates. The company’s performance in the Electronics and Industrial & Specialty segments will be closely scrutinized. Keep an eye on how Element Solutions is navigating the current economic climate and any potential challenges it faces.
In Conclusion
Element Solutions’ upcoming earnings release is a significant event for investors. The company’s financial performance, analyst sentiment, and peer comparison all provide valuable insights into the company’s trajectory. As you prepare for the earnings call, remember to consider all factors, including past performance, future expectations, and the broader industry landscape. Be sure to check back for our full coverage of Element Solutions’ earnings on October 28th.