Arkema SA (ARKAY) AI Stock Analysis

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Arkema SA

(OTC:ARKAY)

71Outperform

Arkema SA’s overall stock score of 71 reflects its mixed financial performance, with declining margins and cash flow pressures offset by a reasonable valuation and a strong dividend yield. The recent earnings call provided positive guidance and strategic initiatives, but technical indicators suggest short-term bearish momentum.

Arkema SA (ARKAY) vs. S&P 500 (SPY)

Market Cap

$5.72B

Dividend Yield3.72%

Average Volume (3M)1.71K

Price to Earnings (P/E)15.6

Beta (1Y)0.86

Revenue Growth0.39%

EPS Growth-14.62%

CountryUS

Employees21,082

SectorBasic Materials

Sector Strength61

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)1.32

Shares Outstanding76,060,830

10 Day Avg. Volume0

30 Day Avg. Volume1,712

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Arkema SA Business Overview & Revenue Model

Company DescriptionArkema SA is a global leader in specialty chemicals and advanced materials, headquartered in Colombes, France. The company operates in three main segments: High Performance Materials, Industrial Specialties, and Coating Solutions. Arkema's core products and services include adhesives, high-performance polymers, fluorochemicals, and acrylics, catering to diverse industries such as automotive, construction, electronics, and packaging.

How the Company Makes MoneyArkema SA generates revenue through the sale of a wide range of specialty chemicals and advanced materials. The High Performance Materials segment, which includes high-performance polymers and adhesives, is a significant contributor to revenue, driven by demand from industries like automotive and electronics. The Industrial Specialties segment, which encompasses fluorochemicals and thiochemicals, benefits from applications in refrigeration, pharmaceuticals, and petrochemicals. The Coating Solutions segment, focusing on acrylics and resins, serves the paint, coatings, and adhesive markets. Arkema also engages in strategic partnerships and acquisitions to enhance its product offerings and expand its market presence. The company's earnings are influenced by factors such as raw material costs, technological innovation, and global economic conditions.

Arkema SA Financial Statement Overview

Summary

Arkema SA demonstrates a mixed financial performance, with stable revenue but declining profitability margins and returns on equity. While debt levels are manageable, the decrease in free cash flow suggests potential liquidity pressures. The company needs to address operational efficiencies and cash flow management to sustain its financial health.

Income Statement

Positive

Arkema SA shows a stable income statement with a slight decline in total revenue from 2022 to 2024. The gross profit margin remained healthy, hovering around 20% over the years. However, net profit margin decreased from 11.3% in 2021 to 3.7% in 2024, indicating declining profitability. EBIT and EBITDA margins also showed a downward trend, reflecting challenges in maintaining operational efficiency.

Balance Sheet

Positive

The balance sheet reflects moderate stability with a reasonable debt-to-equity ratio, increasing from 0.52 in 2020 to 0.61 in 2024. The equity ratio improved, suggesting a stronger equity position over total assets. However, the return on equity dropped from 20.8% in 2021 to 4.7% in 2024, indicating diminished returns for shareholders.

Cash Flow

Positive

Arkema's cash flow statements reveal a challenging situation with free cash flow significantly decreasing from 2020 to 2024 due to higher capital expenditures. The operating cash flow to net income ratio remained stable, but the free cash flow to net income ratio has weakened, reflecting reduced cash generation capacity relative to net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.54B	9.51B	11.55B	9.52B	7.88B
	Gross Profit
1.94B	1.96B	2.58B	2.14B	1.55B
	EBIT
586.00M	681.00M	1.29B	1.05B	474.00M
	EBITDA
1.31B	1.33B	1.97B	1.87B	1.22B
	Net Income Common Stockholders
354.00M	418.00M	965.00M	1.31B	332.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.01B	2.04B	1.59B	2.29B	1.63B
	Total Assets
15.21B	14.52B	13.51B	12.30B	10.71B
	Total Debt
4.55B	4.28B	3.26B	2.76B	2.80B
	Net Debt
2.54B	2.23B	1.67B	477.00M	1.21B
	Total Liabilities
7.45B	7.06B	6.17B	5.95B	5.48B
	Stockholders Equity
7.53B	7.20B	7.30B	6.30B	5.19B
Cash Flow		Free Cash Flow
353.00M	593.00M	766.00M	152.00M	510.00M
	Operating Cash Flow
1.12B	1.27B	1.50B	915.00M	1.11B
	Investing Cash Flow
-940.00M	-1.35B	-2.34B	473.00M	-458.00M
	Financing Cash Flow
-207.00M	516.00M	168.00M	-652.00M	-535.00M

Arkema SA Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price76.06

Price Trends

50DMA

78.80

Negative

100DMA

78.73

Negative

200DMA

83.39

Negative

Market Momentum

MACD

-0.32

Negative

RSI

52.59

Neutral

STOCH

77.88

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARKAY, the sentiment is Neutral. The current price of 76.06 is above the 20-day moving average (MA) of 71.94, below the 50-day MA of 78.80, and below the 200-day MA of 83.39, indicating a neutral trend. The MACD of -0.32 indicates Negative momentum. The RSI at 52.59 is Neutral, neither overbought nor oversold. The STOCH value of 77.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ARKAY.

Arkema SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (49)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXTA	75 Outperform	$7.25B	18.67	21.49%	―	1.77%	47.48%
ARKAY	71 Outperform	$5.72B	15.58	5.39%	3.72%	0.39%	-14.62%
RPM	69 Neutral	$14.17B	22.09	25.53%	1.80%	-0.61%	15.06%
EMN	68 Neutral	$9.00B	9.92	16.16%	4.21%	2.78%	1.50%
PPG	62 Neutral	$25.08B	18.72	18.47%	2.43%	-7.67%	-0.58%
APD	59 Neutral	$61.78B	40.35	10.45%	2.56%	-1.09%	-37.71%
Sector *	49 Neutral	$1.95B	-1.32	-21.23%	3.72%	0.87%	-29.37%

* Basic Materials Sector Average

Performance Comparison

ARKAY

Arkema SA

75.80

-26.79

-26.11%

APD

Air Products and Chemicals

272.21

30.74

12.73%

EMN

Eastman Chemical

76.22

-19.25

-20.16%

PPG

PPG Industries

110.22

-19.95

-15.33%

RPM

RPM International

109.97

0.63

0.58%

AXTA

Axalta Coating Systems

33.29

-2.19

-6.17%

Arkema SA Earnings Call Summary

Earnings Call Date:Feb 27, 2025

(Q4-2024)

% Change Since: -13.25%|

Next Earnings Date:May 07, 2025

Earnings Call Sentiment Neutral

Arkema demonstrated resilience with strong financial performance and strategic growth initiatives, despite challenges in specific segments and geographical regions. Continued focus on sustainability and innovation positions the company well for future growth, although some segments like adhesives and intermediates face near-term uncertainties.

Q4-2024 Updates

Positive Updates

Record EBITDA Growth

Arkema delivered an EBITDA of €1.53 billion in 2024, up 2% year-on-year, driven by strong performance in the Adhesive Solutions and Advanced Materials segments.

Adhesive Solutions Segment Success

The Adhesive Solutions segment increased its EBITDA by more than 8%, reaching a record high EBITDA margin of 15.1%, compared to 14% a year ago.

Advanced Materials Segment Performance

The Advanced Materials segment delivered a robust 20% EBITDA margin, supported by growth in high-performance polymers and applications linked to sustainable megatrends.

Geographical Sales Balance Achieved

Arkema's geographical footprint achieved a balance with Asia being the fastest-growing region. Each main region now represents roughly one-third of sales.

CSR and Decarbonization Progress

Arkema made progress in CSR, specifically achieving a greater reduction in carbon footprint and increasing their Scope 3 emissions reduction target to 67% by 2030.

Strong Financial Position

A dividend of €3.60 per share was proposed, up almost 3% from the previous year, reflecting confidence in Arkema's growth prospects.

Negative Updates

Performance Additives Segment Decline

Performance Additives were down due to high base comparison and technical hurdles like the millennium flooding of the Günzburg site.

Coating Solutions Segment Challenges

The Coating Solutions segment faced upstream acrylics low cycle conditions in Europe and the U.S., affecting performance despite improvements in downstream activities.

Soft Demand in Adhesives

Adhesives saw a soft start to 2025, attributed to geopolitical uncertainty and tariff discussions affecting customer orders.

Intermediates Segment EBITDA Decline

Intermediates segment EBITDA expected to decrease by €30 million in 2025, primarily due to quotas reduction in refrigerant gases.

Company Guidance

The conference call provided detailed guidance on Arkema’s financial performance for the fiscal year 2024, highlighting several key metrics. The company achieved an EBITDA of €1.53 billion, reflecting a 2% increase year-on-year, and an EBITDA margin of 16.1%, slightly up from the previous year. The Adhesive Solutions segment led the growth with an 8% increase in EBITDA, boasting a record high EBITDA margin of 15.1%. The Advanced Materials segment maintained a robust 20% EBITDA margin, driven by high-performance polymers. Overall, Arkema reported sales of €9.5 billion, with volumes up by 2.4%. The company’s geographical footprint was well-balanced, with each major region contributing approximately one-third to total sales, and Asia being the fastest-growing region. Arkema also reaffirmed its commitment to long-term cost savings, targeting €250 million in annualized savings by 2028. Additionally, the company announced a dividend of €3.60 per share, marking a 3% increase from the previous year, with a payout ratio of 44%. Looking ahead to 2025, the company anticipates EBITDA growth ranging between €1.53 billion and €1.67 billion, depending on macroeconomic conditions, and plans to enhance its cash flow to around €600 million.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.