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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
▲(2.48% 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
$2.19B
Dividend Yield3.23%
Average Volume (3M)688.29K
Price to Earnings (P/E)―
Beta (1Y)0.96
Revenue Growth-13.67%
EPS GrowthN/A
CountryUS
Employees3,200
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)1.08
Shares Outstanding45,705,960
10 Day Avg. Volume601,097
30 Day Avg. Volume688,286
Financial Highlights & Ratios
PEG Ratio9.41
Price to Book (P/B)1.49
Price to Sales (P/S)2.02
P/FCF Ratio13.11
Enterprise Value/Market Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$59.33Price Target Upside16.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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:Nov 04, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 03, 2026
Earnings Call Sentiment Neutral
Ashland demonstrated resilience in maintaining margins and achieving expected EBITDA despite sales declines driven by portfolio optimization. Successes in Life Sciences and Personal Care were notable, but challenges remain in the Intermediates segment and demand for coatings. Cash generation and liquidity are strong, but higher tax rates and delayed optimization benefits pose challenges.Q4-2025 Updates
Positive Updates
Resilient Performance Amid Macroeconomic Challenges
Ashland maintained strong margins and achieved revenue and EBITDA in line with expectations despite ongoing macroeconomic challenges. Adjusted EBITDA was $119 million, marking a 5% increase on a comparable basis.
Life Sciences and Personal Care Success
Life Sciences saw continued demand for high-value cellulosic excipients, tablet coatings, and injectables. Personal Care generated broad-based gains with strong volume growth, outperforming a muted market environment.
Manufacturing Optimization Initiative
The $60 million manufacturing optimization program is underway, with $5 million in savings this year and $18 million projected next year, aiding margin improvements.
Strong Adjusted EBITDA Margins
Adjusted EBITDA margin expanded to 24.9%, up 110 basis points from last year, marking the most profitable quarter of the year.
Steady Cash Generation and Improved Liquidity
Ongoing free cash flow totaled $52 million with total liquidity standing at just over $800 million. A $103 million tax refund improved net leverage to closer to mid-2s.
Negative Updates
Sales Decline Due to Portfolio Optimization
Q4 sales were $478 million, down 8% year-over-year, primarily due to portfolio optimization initiatives.
Intermediates Segment Challenges
Intermediates faced pricing and volume pressure, with sales down 8% year-over-year and adjusted EBITDA margins compressing due to lower pricing and production volumes.
Weaker Coatings Demand
Coatings demand remained weak, especially in China, India, and North America, negatively impacting the Specialty Additives segment.
Higher Effective Tax Rate Impacts Earnings
Adjusted earnings per share were down 14% from the prior year, disproportionately impacted by a higher effective tax rate.
Delayed Benefits from Manufacturing Optimization
The realization of benefits from the manufacturing optimization program is extending beyond initial expectations due to various operational challenges.
Company Guidance
During the fourth quarter of fiscal year 2025, Ashland reported sales of $478 million, an 8% decrease year-over-year, largely due to portfolio optimization initiatives. Adjusted EBITDA was $119 million, down 4% from the previous year, with margins expanding to approximately 25%. The company highlighted that excluding the impact of portfolio optimization, sales declined only 1%, and adjusted EBITDA actually increased by 5% on a comparable basis. Ashland's guidance for fiscal 2026 projects sales between $1.835 billion and $1.905 billion, reflecting organic growth of 1% to 5%, and an adjusted EBITDA range of $400 million to $430 million. The company anticipates a free cash flow conversion of 50% with capital expenditures near $100 million. Key factors influencing the guidance include approximately $30 million in savings from restructuring and network optimization, as well as a $20 million impact from resetting performance-based compensation and merit increases.Ashland Financial Statement Overview
Summary
Ashland faces significant financial challenges with declining revenues, profitability issues, and reduced cash flow generation. The income statement shows a troubling trend with a significant decline in both revenue and profitability, including a net loss. The balance sheet indicates moderate stability but with declining equity. Cash flow has also decreased significantly, raising concerns about cash generation relative to earnings.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 | 1.82B | 2.11B | 2.19B | 2.39B | 2.11B | 2.02B |
| Gross Profit | 549.00M | 618.00M | 668.00M | 830.00M | 670.00M | 599.00M |
| EBITDA | -532.00M | 303.00M | 457.00M | 509.00M | 448.00M | -254.00M |
| Net Income | -843.00M | 169.00M | 178.00M | 927.00M | 220.00M | -508.00M |
Balance Sheet | ||||||
| Total Assets | 4.61B | 5.64B | 5.94B | 6.21B | 6.61B | 6.88B |
| Cash, Cash Equivalents and Short-Term Investments | 215.00M | 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 | 2.71B | 2.78B | 2.84B | 2.99B | 3.86B | 3.84B |
| Stockholders Equity | 1.90B | 2.87B | 3.10B | 3.22B | 2.75B | 3.04B |
Cash Flow | ||||||
| Free Cash Flow | 36.00M | 325.00M | 73.00M | -326.00M | 455.00M | 70.00M |
| Operating Cash Flow | 134.00M | 411.00M | 243.00M | -213.00M | 560.00M | 203.00M |
| Investing Cash Flow | -98.00M | -51.00M | -109.00M | 1.56B | -381.00M | 8.00M |
| Financing Cash Flow | -161.00M | -479.00M | -371.00M | -896.00M | -426.00M | 9.00M |
Ashland Technical Analysis
Positive
50.74
Price Trends
50.55
Positive
51.19
Negative
53.27
Negative
Market Momentum
-0.19
Negative
56.23
Neutral
35.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ASH, the sentiment is Positive. The current price of 50.74 is above the 20-day moving average (MA) of 49.27, above the 50-day MA of 50.55, and below the 200-day MA of 53.27, indicating a neutral trend. The MACD of -0.19 indicates Negative momentum. The RSI at 56.23 is Neutral, neither overbought nor oversold. The STOCH value of 35.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.67B | 29.53 | 36.39% | 1.90% | 4.98% | 30.84% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | $1.79B | 95.84 | -0.09% | 2.26% | -4.49% | -100.80% | |
58 Neutral | $2.25B | ― | -0.64% | 1.51% | 0.08% | -107.33% | |
50 Neutral | $1.92B | ― | -106.83% | ― | -14.45% | 49.92% | |
46 Neutral | $2.19B | ― | ― | 3.23% | -13.67% | ― | |
41 Neutral | $1.83B | ― | -87.50% | 4.91% | 2.48% | -459.90% |
* Basic Materials Sector Average
ASH
Ashland
50.74
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-40.32%
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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.