Arkema SA (ARKAY) AI Stock Analysis

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Arkema SA

(OTC:ARKAY)

72Outperform

Arkema SA's overall stock score reflects a mixed financial performance and technical outlook. Strong growth in Asia and successful project integrations are positive signs, but declining profitability and liquidity pressures remain concerns. Fair valuation and a solid dividend yield offer some reassurance to investors.

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

Market Cap

$5.93B

Dividend Yield3.61%

Average Volume (3M)1.71K

Price to Earnings (P/E)17.3

Beta (1Y)0.85

Revenue Growth1.70%

EPS Growth-11.22%

CountryUS

Employees21,150

SectorBasic Materials

Sector Strength60

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)1.48

Shares Outstanding76,060,830

10 Day Avg. Volume0

30 Day Avg. Volume1,712

Financial Highlights & Ratios

PEG Ratio-6.95

Price to Book (P/B)0.87

Price to Sales (P/S)0.00

P/FCF Ratio17.19

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

Positive

Last Price76.46

Price Trends

50DMA

77.80

Positive

100DMA

78.40

Negative

200DMA

82.98

Negative

Market Momentum

MACD

-0.03

Negative

RSI

59.47

Neutral

STOCH

46.55

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARKAY, the sentiment is Positive. The current price of 76.46 is above the 20-day moving average (MA) of 73.80, below the 50-day MA of 77.80, and below the 200-day MA of 82.98, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 59.47 is Neutral, neither overbought nor oversold. The STOCH value of 46.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	78 Outperform	$7.18B	15.85	23.59%	―	0.96%	82.78%
RPM	73 Outperform	$14.69B	22.92	25.53%	1.77%	-0.61%	15.06%
ARKAY	72 Outperform	$5.93B	17.32	4.87%	3.61%	1.70%	-11.22%
EMN	68 Neutral	$9.51B	10.49	16.16%	4.06%	2.78%	1.50%
PPG	63 Neutral	$25.73B	19.20	18.47%	2.37%	-7.67%	-0.58%
APD	59 Neutral	$60.90B	39.77	10.45%	2.62%	-1.09%	-37.71%
Sector *	49 Neutral	$1.99B	-1.09	-21.26%	3.60%	1.47%	-31.20%

* Basic Materials Sector Average

Performance Comparison

ARKAY

Arkema SA

77.49

-27.03

-25.86%

APD

Air Products and Chemicals

274.42

18.22

7.11%

EMN

Eastman Chemical

81.25

-15.80

-16.28%

PPG

PPG Industries

113.06

-18.30

-13.93%

RPM

RPM International

114.39

2.77

2.48%

AXTA

Axalta Coating Systems

32.38

-3.26

-9.15%

Arkema SA Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 3.55%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

Arkema's Q1 2025 earnings call highlighted strong growth in Asia and successful integration of acquisitions, while facing challenges with weak demand in Europe and the U.S., and significant declines in the Intermediates segment. The company remains optimistic about future growth through major projects and renewable energy initiatives.

Q1-2025 Updates

Positive Updates

Strong Performance in Asia

Asia demonstrated significant growth, particularly in high-performance polymers, with a 7% increase in EBITDA for Advanced Materials driven by the dynamic of new business developments in batteries, electronics, and sports.

Impressive Growth in PI Advanced Materials

PI Advanced Materials (PIAM) saw its EBITDA increase by more than 70% in Q1, supported by the rising demand for ultra-thin PI films for smartphones.

Successful Integration of Dow's Laminating Adhesives

Bostik benefited from the integration of Dow's laminating adhesives, starting well and contributing to sales with a positive scope effect of EUR 51 million.

Progress in Major Projects

Arkema is progressing with the ramp-up of the 1233zd unit in the U.S. and the greenfield polyamide 11 plant in Singapore, which is expected to exceed breakeven by summer.

Renewable Energy Initiatives

Arkema signed a long-term agreement with ENGIE for the supply of biomethane for Bostik in France, covering 85% of gas consumption from renewable sources.

Negative Updates

Weak Market Conditions in Europe and the U.S.

Demand was globally slow across most markets in Europe and the U.S. due to ongoing uncertainty around trade tariffs and a wait-and-see attitude from customers.

EBITDA Decline

Overall EBITDA was slightly down at EUR 329 million, a 6% decrease from last year, mainly due to significant decreases in the Intermediates segment.

Challenges in the Intermediates Segment

Intermediates, representing 7% of sales, saw a significant decrease due to weak refrigerant gases, with the segment's EBITDA down nearly 40% year-on-year.

Low Cycle Conditions in Coating Solutions

Coating Solutions experienced low cycle conditions in upstream acrylic, affecting segment performance with EBITDA at EUR 58 million.

High Working Capital Outflows

Q1 recurring cash flow was at minus EUR 138 million, attributed to working capital seasonality and a significant payout in the quarter.

Company Guidance

During the Q1 2025 results conference call, Arkema's CEO Thierry Le Hénaff provided guidance amidst a challenging macroeconomic environment characterized by volatility and uncertainty, particularly due to trade tariffs. The company reported an EBITDA of EUR 329 million, a slight 6% decline year-on-year, with Specialty Materials showing resilience despite a 3% decline. Advanced Materials saw a 7% EBITDA increase, driven by high-performance polymers and significant growth in Asia. Arkema aims to achieve an EBITDA at least equal to last year's and a recurring cash flow close to EUR 600 million for 2025. Key projects include the ramp-up of new production units, with expectations for significant contributions in the second half of the year. The company is also progressing with its greenfield polyamide 11 plant in Singapore and planning a new PVDF capacity in the U.S., projecting high returns with a USD 20 million investment. Arkema remains focused on cost control, operational efficiency, and leveraging its global industrial footprint to navigate the uncertainties of global trade dynamics.

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.