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Ashland (ASH)
NYSE:ASH
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Ashland
(NYSE:ASH)
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Rating:46Neutral
Price Target:
$52.00
▲(4.54% Upside)
Ashland's overall stock score reflects significant financial challenges, with declining revenues and profitability issues being the most impactful factors. Technical analysis provides mixed signals, and valuation concerns are heightened by a negative P/E ratio. While the earnings call shows some resilience and strategic progress, the ongoing challenges in key segments and significant impairments balance the outlook.
Positive Factors
Resilient Margins
Maintaining strong EBITDA margins in a challenging market shows operational efficiency and cost management, supporting long-term profitability.
Life Sciences Growth
Sustained growth in Life Sciences with high margins indicates robust demand and successful product innovation, bolstering future revenue streams.
Strong Free Cash Flow
High free cash flow conversion reflects strong cash generation, providing financial flexibility for investments and debt management.
Negative Factors
Revenue Decline
Significant revenue decline indicates weakening demand and market challenges, potentially impacting long-term growth and market share.
Goodwill Impairment
Large goodwill impairment reflects overvaluation of past acquisitions, affecting balance sheet strength and future earnings potential.
Specialty Additives Challenges
Declining sales in Specialty Additives highlight competitive and demand challenges, risking future revenue and market position in key segments.
Ashland (ASH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.27B
Dividend Yield3.3%
Average Volume (3M)488.94K
Price to Earnings (P/E)21.0
Beta (1Y)0.89
Revenue Growth-11.38%
EPS Growth-690.99%
CountryUS
Employees3,200
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.04
Shares Outstanding45,705,960
10 Day Avg. Volume559,419
30 Day Avg. Volume488,942
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.55
Enterprise Value/Revenue1.89
Enterprise Value/Gross Profit6.25
Enterprise Value/Ebitda-6.42
Forecast
1Y Price Target
$63.14Price Target Upside26.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Ashland Business Overview & Revenue Model
Company DescriptionAshland Inc. provides additives and specialty ingredients worldwide. It operates through Life Sciences; Personal Care & Household; Specialty Additives; and Intermediates and Solvents segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. The Personal Care & Household segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. The Intermediates and Solvents segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. Ashland Inc. was founded in 1924 and is based in Wilmington, Delaware.
How the Company Makes MoneyAshland generates revenue primarily through the sale of specialty chemicals and materials across its diverse product portfolio. The company's revenue model is driven by several key streams, including the provision of various chemical formulations tailored for specific applications in industries such as personal care, pharmaceuticals, and food. Additionally, Ashland benefits from long-term contracts and partnerships with customers that provide stable revenue. The company also invests in research and development to innovate and improve existing products, which helps to create new revenue opportunities. Strategic collaborations and acquisitions further enhance Ashland's market position, contributing to its overall earnings.
Ashland Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
Ashland demonstrated resilience in a challenging market by maintaining strong margins and progressing on strategic initiatives. However, sales declines, goodwill impairment, and challenges in key segments such as Specialty Additives and Personal Care highlight ongoing difficulties. The company's completion of portfolio optimization and strong cash flow are positive indicators, but the significant impairments and continued demand challenges balance the outlook.Q3-2025 Updates
Positive Updates
Resilient Performance in Mixed Demand Environment
Despite a challenging market, Ashland delivered adjusted EBITDA in line with expectations at $113 million and maintained strong EBITDA margins of 24.4%.
Life Sciences Segment Growth
Life Sciences maintained strong pharma growth momentum with 33% margins for the second consecutive quarter and achieved high-impact product launches.
Strong Free Cash Flow
Achieved nearly 100% free cash flow conversion, demonstrating robust underlying business strength.
Completion of Portfolio Optimization
Portfolio optimization is complete, and restructuring is ahead of schedule, contributing to strong margins across all business units.
Manufacturing Optimization Program Progress
The $60 million manufacturing optimization program is advancing well, with significant savings expected to phase in over time.
Negative Updates
Sales Decline
Q3 sales were $463 million, down 15% year-over-year, driven by a 5% organic sales decline due to lower volumes.
Noncash Goodwill Impairment
Recorded a $706 million noncash goodwill impairment related to Life Sciences and Specialty Additives due to market capitalization decline.
Specialty Additives Segment Challenges
Specialty Additives faced a 13% sales decline due to weak demand in China and ongoing competitive pressures, particularly in coatings.
Intermediates Business Pressure
Intermediates sales decreased from $36 million to $33 million, with continued pricing and production challenges.
Challenges in Personal Care Segment
Personal Care sales declined 16% year-over-year, impacted by portfolio optimization and customer-specific weaknesses in biofunctional actives.
Company Guidance
In the recent Ashland Inc. Third Quarter 2025 Earnings Call, the company provided updated guidance for fiscal year 2025, projecting full-year sales between $1.825 billion and $1.85 billion, with adjusted EBITDA expected to range from $400 million to $410 million. The third quarter saw sales of $463 million, a 15% year-over-year decline, and an adjusted EBITDA of $113 million, down 19% compared to the previous year. Despite a challenging demand environment, Ashland maintained resilient adjusted EBITDA margins at 24.4%. The company highlighted strong performance in its Life Sciences segment, which posted a 33% EBITDA margin for the second consecutive quarter. While the Personal Care segment faced a 16% decline in sales, it is showing signs of recovery. Specialty Additives experienced a 13% drop in sales, impacted by weak demand in China. Ashland emphasized its strategic focus on cost savings, having completed its $60 million manufacturing optimization program, with significant cost benefits expected to flow into fiscal year 2026. The company also reported nearly 100% free cash flow conversion in the quarter, demonstrating robust underlying business strength.Ashland Financial Statement Overview
Summary
Ashland faces significant financial challenges with declining revenues, negative profitability, and reduced cash flow generation. The balance sheet shows moderate leverage, but the decline in equity and cash flow metrics poses risks that need immediate attention.Income Statement
The income statement reveals a troubling trend with a significant decline in both revenue and profitability. The TTM (Trailing-Twelve-Months) period shows a decrease in total revenue to $1.869 billion from $2.113 billion in the previous year, highlighting negative revenue growth. The gross profit margin decreased, and the net profit margin turned negative with a net loss of $873 million. Additionally, the EBIT and EBITDA margins are concerning as they are significantly negative, indicating operational challenges.30
Negative
Balance Sheet
The balance sheet indicates moderate stability with a debt-to-equity ratio of 0.79, which suggests a manageable level of leverage. However, the equity ratio has decreased over time, now at 40.9% in the TTM period. Stockholders' equity has also declined, pointing to reduced financial stability. The company needs to address its declining equity base to ensure sustained financial health.55
Neutral
Cash Flow
The cash flow statement shows a decline in free cash flow from $325 million to $69 million over the TTM period, indicating a significant drop in free cash flow growth rate. Operating cash flow remains positive but has decreased compared to previous years. The free cash flow to net income ratio is negative due to net losses, which raises concerns about cash generation relative to earnings.45
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.87B | 2.11B | 2.19B | 2.39B | 2.11B | 2.02B |
| Gross Profit | 564.00M | 618.00M | 668.00M | 830.00M | 670.00M | 599.00M |
| EBITDA | -549.00M | 303.00M | 457.00M | 509.00M | 448.00M | -254.00M |
| Net Income | -860.00M | 169.00M | 178.00M | 927.00M | 220.00M | -508.00M |
Balance Sheet | ||||||
| Total Assets | 4.62B | 5.64B | 5.94B | 6.21B | 6.61B | 6.88B |
| Cash, Cash Equivalents and Short-Term Investments | 207.00M | 300.00M | 417.00M | 646.00M | 210.00M | 454.00M |
| Total Debt | 1.49B | 1.47B | 1.46B | 1.38B | 2.10B | 1.99B |
| Total Liabilities | 2.73B | 2.78B | 2.84B | 2.99B | 3.86B | 3.84B |
| Stockholders Equity | 1.89B | 2.87B | 3.10B | 3.22B | 2.75B | 3.04B |
Cash Flow | ||||||
| Free Cash Flow | 59.00M | 325.00M | 73.00M | -326.00M | 455.00M | 70.00M |
| Operating Cash Flow | 161.00M | 411.00M | 243.00M | -213.00M | 560.00M | 203.00M |
| Investing Cash Flow | -61.00M | -51.00M | -109.00M | 1.56B | -381.00M | 8.00M |
| Financing Cash Flow | -330.00M | -479.00M | -371.00M | -896.00M | -426.00M | 9.00M |
Ashland Technical Analysis
Negative
49.74
Price Trends
52.69
Negative
51.55
Negative
56.95
Negative
Market Momentum
-0.60
Positive
35.51
Neutral
11.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASH, the sentiment is Negative. The current price of 49.74 is below the 20-day moving average (MA) of 53.91, below the 50-day MA of 52.69, and below the 200-day MA of 56.95, indicating a bearish trend. The MACD of -0.60 indicates Positive momentum. The RSI at 35.51 is Neutral, neither overbought nor oversold. The STOCH value of 11.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ASH.
Ashland Risk Analysis
Ashland disclosed 18 risk factors in its most recent earnings report. Ashland reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ashland Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | 2.85B | 33.09 | 33.66% | 1.76% | 6.52% | 24.81% | |
70 Neutral | 2.42B | -308.08 | -0.53% | 1.40% | -3.09% | -106.46% | |
63 Neutral | 1.98B | 105.50 | 1.49% | 2.05% | -5.45% | -87.13% | |
61 Neutral | 2.05B | -9.46 | -179.45% | ― | -14.45% | 49.92% | |
51 Neutral | 2.55B | -6.08 | -177.22% | 3.97% | 2.48% | -459.90% | |
46 Neutral | $2.27B | 21.03 | -34.43% | 3.30% | -11.38% | -690.99% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
Performance Comparison
ASH
Ashland
49.74
-35.48
-41.63%
IOSP
Innospec
79.55
-30.49
-27.71%
KWR
Quaker Chemical
138.85
-23.21
-14.32%
WDFC
WD-40 Company
210.36
-42.25
-16.73%
CC
Chemours Company
17.01
-0.96
-5.34%
NGVT
Ingevity
56.35
16.98
43.13%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.