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Solventum Corporation
(NYSE:SOLV)
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Rating:66Neutral
Price Target:
$99.00
▲(8.07% Upside)
Action:Downgraded
Date:08/07/26
The score is anchored by mixed fundamentals: strong profitability and improved leverage are outweighed by weak TTM cash flow and negative free cash flow. Guidance was raised materially and sentiment was positive, supporting the outlook, while technicals show a constructive uptrend. Valuation is attractive on a low P/E, but near-term results and cash generation remain sensitive to ERP timing reversals and separation-related volatility.
Positive Factors
Strong Profitability and Raised Guidance
Healthy profitability and materially higher full-year guidance indicate improving earnings power and management confidence. If operating execution holds after excluding one-time benefits, stronger margins and earnings can support reinvestment, resilience, and sustained value creation over the coming quarters.
Negative Factors
Weak Current Cash Generation
The sharp deterioration in operating and free cash flow weakens the quality of current earnings and limits internally funded investment. Continued cash burn would constrain debt reduction, acquisitions, and shareholder returns, while making execution of the transformation more dependent on improved working capital and later-period cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Profitability and Raised Guidance
Healthy profitability and materially higher full-year guidance indicate improving earnings power and management confidence. If operating execution holds after excluding one-time benefits, stronger margins and earnings can support reinvestment, resilience, and sustained value creation over the coming quarters.
Read all positive factors
Solventum Corporation Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Reports profit after operating costs for each segment, showing which parts of Solventum generate the most earnings and where margins are under pressure. Comparing operating income across segments helps investors judge capital allocation, operational efficiency, and where management should prioritize improvements or investments.
Reports profit after operating costs for each segment, showing which parts of Solventum generate the most earnings and where margins are under pressure. Comparing operating income across segments helps investors judge capital allocation, operational efficiency, and where management should prioritize improvements or investments.
Data provided by:
The Fly
The FlySolventum Corporation (SOLV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.12B
Dividend YieldN/A
Average Volume (3M)981.12K
Price to Earnings (P/E)10.8
Beta (1Y)0.77
Revenue Growth-1.18%
EPS Growth277.21%
CountryUS
Employees20,584
SectorHealthcare
Sector Strength45
IndustryMedical - Instruments & Supplies
Share Statistics
EPS (TTM)8.22
Shares Outstanding170,223,720
10 Day Avg. Volume961,446
30 Day Avg. Volume981,121
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)2.73
Price to Sales (P/S)1.66
P/FCF Ratio-1.38K
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$98.50Price Target Upside7.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)7.16
Revenue Forecast (FY)$8.24B
Solventum Corporation Business Overview & Revenue Model
Company Description
Solventum Corporation, established in 2023 and headquartered in Saint Paul, Minnesota, operates as a healthcare entity dedicated to pioneering, producing, and commercializing diverse solutions that address critical needs for both customers and pat...
How the Company Makes Money
Solventum makes money primarily by selling healthcare products and related solutions to providers and channel partners. Key revenue streams include: (1) consumable and procedure-driven medical products (e.g., medical/surgical supplies and solution...
Solventum Corporation Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive tone: the company beat expectations on top and bottom lines, raised full-year guidance (organic growth, operating margin, EPS, and free cash flow), accelerated share repurchases, showed strong segment performance (especially Dental and MedSurg) and highlighted successful M&A (Acera) and progress on separation/ERP migration and product pipeline. Notable near-term headwinds include ERP advanced-order timing that will reverse in Q3 (creating quarter-to-quarter volatility), tariff and inflation pressures (partly offset by a one-time $100M tariff refund), material litigation charges, and separation-related cash demands. Overall, management presented confidence in transformation execution and a pathway to improved cash flow and margin expansion despite measurable one-time and timing-related challenges.Positive Updates
Top-line Beat and Organic Growth
Total sales of $2.2B; reported sales growth 2.2% and organic sales growth 9.5% year-over-year. Management noted organic growth and EPS were ahead of expectations; normalized Q2 organic growth ~4% after adjusting for ERP advanced orders (~630 bps).
Negative Updates
Tariff and Inflation Pressure
Excluding the $100M tariff refund, gross margin (~55.6%) was ~40 bps lower year-over-year, driven by tariff impact (~150 bps) and inflation headwinds; tariffs were a material headwind before the one-time refund.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-line Beat and Organic Growth
Total sales of $2.2B; reported sales growth 2.2% and organic sales growth 9.5% year-over-year. Management noted organic growth and EPS were ahead of expectations; normalized Q2 organic growth ~4% after adjusting for ERP advanced orders (~630 bps).
Read all positive updates
Company Guidance
Solventum tightened and raised its 2026 guidance: organic sales growth to 2.5–3.0% (3.5–4.0% excluding ~100 bps of SKU exits), with FX expected to benefit ~+100 bps; operating margin now guided to 22.2–22.7% (up from 21.0–21.5%, reflecting ~120 bps of tariff‑refund benefit); annual non‑operating expense ≈ $300M and tax rate 19.5–20.5%; EPS raised to $7.10–7.20 (prior $6.40–6.60); free cash flow now expected $200–300M (prior ≈$200M), with the large majority of FCF in Q4. Q2 included ~$125M of ERP advanced orders (added ≈$0.34 to EPS and ~700 bps to MedSurg growth) that will mostly reverse in Q3 (≈‑$0.34 EPS headwind), plus a ~$100M one‑time tariff refund (≈$0.48 EPS benefit); Q2 results: sales $2.2B (+9.5% organic, +2.2% reported), MedSurg $1.4B (+8.9% organic), Dental $396M (+15.2% organic), HIS $354M (+5.4% organic); gross margin 60.1% (ex‑refund ≈55.6%); operating income $627M (28.4% margin; ex timing/refund ≈21.7%); EPS $2.55 (ex orders/refund $1.73); cash $403M, net debt $4.7B, Q2 FCF $144M; repurchased ~4M shares for $288M in Q2 (4.8M / $355M YTD); separation progress: ~70% of ~200 TSAs exited, ~950 of 1,200 systems migrated, targeting 90% TSA exit by end‑2026.Solventum Corporation Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
58
Neutral
Cash Flow
29
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.31B | 8.32B | 8.25B | 8.20B | 8.13B | 8.17B |
| Gross Profit | 4.54B | 4.45B | 4.59B | 4.69B | 4.70B | 4.92B |
| EBITDA | 2.60B | 2.55B | 1.53B | 2.23B | 2.27B | 2.48B |
| Net Income | 1.43B | 1.56B | 479.00M | 1.35B | 1.34B | 1.46B |
Balance Sheet | ||||||
| Total Assets | 14.24B | 14.29B | 14.46B | 13.94B | 13.59B | 14.07B |
| Cash, Cash Equivalents and Short-Term Investments | 403.00M | 878.00M | 762.00M | 194.00M | 61.00M | 91.00M |
| Total Debt | 5.29B | 5.04B | 8.01B | 8.30B | 95.00M | 112.00M |
| Total Liabilities | 9.44B | 9.24B | 11.50B | 2.28B | 1.85B | 2.02B |
| Stockholders Equity | 4.80B | 5.05B | 2.96B | 11.67B | 11.74B | 12.06B |
Cash Flow | ||||||
| Free Cash Flow | -118.00M | -10.00M | 805.00M | 1.63B | 1.43B | 1.93B |
| Operating Cash Flow | 209.00M | 369.00M | 1.19B | 1.92B | 1.68B | 2.20B |
| Investing Cash Flow | 2.86B | 2.80B | -380.00M | -230.00M | -253.00M | -278.00M |
| Financing Cash Flow | -3.16B | -3.06B | -240.00M | -1.55B | -1.46B | -1.96B |
Solventum Corporation Technical Analysis
Positive
91.61
Price Trends
86.08
Positive
80.76
Positive
77.68
Positive
Market Momentum
0.59
Positive
51.05
Neutral
29.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOLV, the sentiment is Positive. The current price of 91.61 is above the 20-day moving average (MA) of 90.22, above the 50-day MA of 86.08, and above the 200-day MA of 77.68, indicating a neutral trend. The MACD of 0.59 indicates Positive momentum. The RSI at 51.05 is Neutral, neither overbought nor oversold. The STOCH value of 29.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOLV.
Solventum Corporation Risk Analysis
Solventum Corporation disclosed 42 risk factors in its most recent earnings report. Solventum Corporation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Solventum Corporation Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $25.50B | 46.02 | 18.51% | 0.24% | 12.42% | 17.07% | |
66 Neutral | $15.12B | 10.81 | 28.96% | ― | -1.18% | 277.21% | |
65 Neutral | $49.29B | 54.50 | 3.79% | 2.20% | -2.56% | -40.38% | |
64 Neutral | $10.50B | -18.50 | -10.34% | ― | -1.57% | -183.83% | |
58 Neutral | $5.28B | -5.35 | -31.83% | 1.09% | -14.49% | -644.98% | |
57 Neutral | $11.79B | -11.18 | -16.60% | 0.18% | 5.36% | -632.85% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SOLV
Solventum Corporation
88.84
15.08
20.44%
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BDX
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WST
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362.31
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AVTR
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24.66%
Solventum Corporation Corporate Events
Business Operations and StrategyM&A Transactions
Solventum to Separate Health Information Systems Business
Positive
Aug 5, 2026
On Aug. 5, 2026, Solventum announced plans to separate its Health Information Systems software business as part of an ongoing portfolio optimization and three-phase transformation strategy. Management and the board expect the move to sharpen Solve...
Executive/Board ChangesRegulatory Filings and Compliance
Solventum Names New Chief Accounting Officer
Positive
Jul 20, 2026
On July 16, 2026, Solventum Corporation’s board appointed 50‑year‑old finance executive Neil Zieselman as Senior Vice President, Controller and Chief Accounting Officer, effective August 10, 2026, succeeding retiring incumbent Ma...
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.