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TRONOX Ltd (TROX)
NYSE:TROX
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TRONOX
(NYSE:TROX)
48Neutral
Positive Factors
Cost Improvement
A cost improvement program is expected to contribute positively in the second half of the year, mostly from SG&A cuts.
Mine Commissioning
The commissioning of the Fairbreeze mine investment is expected to provide financial benefits in the third quarter.
Supply and Demand
The permanent idling of TROX's Botlek facility will result in a tighter supply and demand environment, leading to a notable improvement in future cash flow.
Negative Factors
Earnings Risk
There is a risk that Tronox may not achieve the lower end of its projected earnings range if China does not reduce its exports following anti-dumping investigations.
Inventory Costs
High-cost inventories tied to Botlek and the Mining business are expected to negatively impact 2Q earnings.
Market Conditions
Ongoing weak market conditions and excessive debt make a significant bear case a reasonable probability.
TRONOX (TROX) vs. S&P 500 (SPY)
Market Cap
$841.44M
Dividend Yield9.77%
Average Volume (3M)3.06M
Price to Earnings (P/E)―
Beta (1Y)1.97
Revenue Growth4.15%
EPS Growth57.25%
CountryUS
Employees6,500
SectorBasic Materials
Sector Strength63
IndustryChemicals
Share Statistics
EPS (TTM)-0.15
Shares Outstanding158,462,500
10 Day Avg. Volume3,180,142
30 Day Avg. Volume3,055,317
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 Cap4.88
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit7.98
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.81Price Target Upside86.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
TRONOX Business Overview & Revenue Model
Company DescriptionTronox Holdings plc operates as a vertically integrated manufacturer of TiO2 pigment in North America, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates titanium-bearing mineral sand mines; and engages in beneficiation and smelting operations. It offers TiO2 pigment; ultrafine specialty TiO2; zircon; feedstock; pig iron; titanium tetrachloride; and other products. The company's products are used for the manufacture of paints, coatings, plastics, and paper, as well as various other applications. Tronox Holdings plc is based in Stamford, Connecticut.
How the Company Makes MoneyTronox generates revenue primarily through the sale of titanium dioxide pigment, which is its core product. The pigment is widely used in various industries, including coatings, plastics, and paper, due to its ability to provide opacity, brightness, and whiteness. Tronox's revenue model is built on long-term supply agreements and strategic partnerships with companies in these industries, ensuring a consistent demand for its products. Additionally, Tronox benefits from its vertically integrated operations, owning and operating its own mines and production facilities, which helps control costs and stabilize supply chains. The company's earnings are further supported by its diverse geographic presence, allowing it to capitalize on regional market demands and economic conditions.
TRONOX Financial Statement Overview
Summary
TROX's financial performance is challenged by declining revenue and negative net profit margins. Despite operational efficiency, high leverage poses a risk. Positive cash flows and improving free cash flow position offer some resilience, but strategic improvements are needed.Income Statement
TROX's income statement shows a decline in revenue over the TTM (Trailing-Twelve-Months) period, with a gross profit margin of 16.47% and a negative net profit margin of -1.70%. The revenue decreased by 25.16% compared to the previous year (2024), reflecting a challenging market environment. EBIT and EBITDA margins are moderate at 7.73% and 18.25%, respectively, indicating reasonable operational efficiency but insufficient to offset net losses.45
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 1.76, suggesting significant leverage. However, the equity ratio stands at 27.58%, providing some stability amidst the liabilities. Return on equity is negative due to losses, highlighting profitability challenges.50
Neutral
Cash Flow
Cash flow analysis indicates a positive free cash flow growth rate, shifting from negative to positive over the TTM. The operating cash flow to net income ratio is robust, demonstrating strong cash generation relative to net losses. However, the free cash flow to net income ratio is constrained by capital expenditures.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.07B | 2.85B | 3.45B | 3.57B | 2.76B | Gross Profit |
| 515.00M | 462.00M | 832.00M | 895.00M | 621.00M | EBIT |
| 219.00M | 186.00M | 458.00M | 577.00M | 271.00M | EBITDA |
| 525.00M | 458.00M | 714.00M | 840.00M | 619.00M | Net Income Common Stockholders |
| -48.00M | -316.00M | 497.00M | 286.00M | 969.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 151.00M | 273.00M | 164.00M | 228.00M | 619.00M | Total Assets |
| 6.04B | 6.13B | 6.31B | 5.99B | 6.57B | Total Debt |
| 2.99B | 2.95B | 2.67B | 2.66B | 3.40B | Net Debt |
| 2.84B | 2.68B | 2.50B | 2.43B | 2.78B | Total Liabilities |
| 4.25B | 4.15B | 3.90B | 3.94B | 4.70B | Stockholders Equity |
| 1.76B | 1.94B | 2.36B | 1.99B | 1.70B |
| Cash Flow | Free Cash Flow | |||
| -70.00M | -77.00M | 170.00M | 468.00M | 160.00M | Operating Cash Flow |
| 300.00M | 184.00M | 598.00M | 740.00M | 355.00M | Investing Cash Flow |
| -343.00M | -255.00M | -415.00M | -269.00M | -229.00M | Financing Cash Flow |
| -71.00M | 176.00M | -250.00M | -877.00M | 214.00M |
TRONOX Technical Analysis
Negative
5.25
Price Trends
6.21
Negative
7.84
Negative
10.29
Negative
Market Momentum
-0.28
Negative
42.76
Neutral
24.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TROX, the sentiment is Negative. The current price of 5.25 is below the 20-day moving average (MA) of 5.36, below the 50-day MA of 6.21, and below the 200-day MA of 10.29, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 42.76 is Neutral, neither overbought nor oversold. The STOCH value of 24.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TROX.
TRONOX Risk Analysis
TRONOX disclosed 40 risk factors in its most recent earnings report. TRONOX 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
TRONOX Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $810.84M | 15.54 | 10.22% | 8.13% | -6.76% | -3.19% | |
70 Neutral | $607.84M | 7.24 | 11.26% | 2.81% | 6.03% | 5079.05% | |
61 Neutral | $20.36B | 72.36 | 1.60% | 9.57% | -2.08% | -76.11% | |
55 Neutral | $5.48B | 6.84 | -26.94% | 3.01% | -5.98% | -183.27% | |
54 Neutral | $1.98B | ― | -4.46% | 8.92% | 0.02% | -43.65% | |
49 Neutral | $1.95B | -1.21 | -21.28% | 3.72% | 1.18% | -30.47% | |
48 Neutral | $841.44M | ― | -8.44% | 9.77% | 4.15% | 57.25% |
* Basic Materials Sector Average
Performance Comparison
TROX
TRONOX
5.25
-13.08
-71.36%
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Celanese
51.21
-103.64
-66.93%
HUN
Huntsman
12.05
-11.57
-48.98%
WLKP
Westlake Chemical PRN
23.07
1.99
9.44%
ASIX
AdvanSix
23.11
-1.19
-4.90%
DOW
Dow
29.48
-26.50
-47.34%
TRONOX Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -2.96%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with notable achievements in TiO2 demand growth and a strong cost improvement plan. However, these are balanced by significant challenges including a net loss, decline in zircon revenues, and high production costs. The company's strategic actions and cost reductions are promising, but the financial setbacks and market challenges temper the overall outlook.Q1-2025 Updates
Positive Updates
Stronger Than Normal TiO2 Demand
The company realized a 12% increase in TiO2 volumes from Q4 2024 to Q1 2025, with Europe leading sequential growth due to antidumping duties.
Sequential Revenue Growth
Revenue increased by 9% sequentially to $738 million, primarily driven by higher TiO2 sales volumes.
Cost Improvement Program
The company expects to deliver $125 million to $175 million in sustainable run rate cost improvements by the end of 2026, with a focus on operational excellence and technology.
Progress on Mining Projects
The expansion at Fairbreeze and East OFS is expected to be completed in 2025, with the commissioning of Fairbreeze in July and East OFS in November leading to cost improvements from 2026 onward.
Negative Updates
Net Loss in the Quarter
The company reported a net loss of $111 million, including $87 million of restructuring and other charges, primarily non-cash costs related to the idling of Botlek.
Decline in Zircon Revenues
Zircon revenues decreased 22% compared to the prior year, driven by a 15% decrease in sales volume and a 7% decrease due to price including mix.
Higher Production Costs
Production costs in the first quarter were higher than expected, primarily due to lower operating rates and increases in direct material prices.
Free Cash Flow Usage
The company reported a use of $142 million in free cash flow, including $110 million of capital expenditures.
Debt Levels and Leverage
Total debt was $3 billion with a net debt of $2.8 billion, and the net leverage ratio stood at 5.2 times on a trailing twelve-month basis.
Company Guidance
In the Q1 2025 earnings call, Tronox Holdings plc provided guidance on various metrics, indicating a mixed financial performance with strategic actions to mitigate challenges. The company reported a 9% sequential increase in revenue to $738 million, driven by a 12% uplift in TiO2 volumes, particularly in Europe due to antidumping duties. However, they faced a $61 million loss from operations and a net loss of $111 million, including $87 million in restructuring charges mainly from idling the Botlek plant. Adjusted EBITDA was $112 million, with a margin of 15.2%. Despite these hurdles, Tronox maintained its full-year guidance, projecting revenue between $3 billion and $3.4 billion and adjusted EBITDA in the range of $525 million to $625 million. They anticipate stronger performance in the second half of the year, with operational efficiencies and strategic measures expected to yield $125 million to $175 million in cost improvements by 2026. Additionally, the company targets a free cash flow of at least $50 million for 2025, supported by reduced capital expenditures and effective working capital management.TRONOX Corporate Events
Dividends
Tronox Declares Quarterly Dividend for Shareholders
Positive
May 7, 2025
On May 7, 2025, Tronox Holdings plc announced that its Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on July 2, 2025, to shareholders recorded by May 19, 2025. This announcement underscores Tronox’s commitment to returning value to its shareholders and may enhance its attractiveness to investors, reinforcing its position as a leading player in the titanium dioxide market.
Spark’s Take on TROX Stock
According to Spark, TipRanks’ AI Analyst, TROX is a Neutral.
TROX faces significant financial and market challenges, reflected in a low overall score. Key risks include declining revenue, high leverage, and net losses. However, positive aspects such as cash flow improvement and strategic cost reductions offer some hope for recovery. Technical and valuation metrics provide further caution, with bearish momentum and unattractive valuation metrics.
To see Spark’s full report on TROX stock, click here.
Dividends
Tronox Declares Quarterly Cash Dividend for 2025
Positive
Feb 19, 2025
On February 18, 2025, Tronox Holdings plc announced that its Board of Directors declared a quarterly cash dividend of $0.125 per share, payable on April 4, 2025, to shareholders of record by March 3, 2025. This financial move underscores Tronox’s commitment to providing returns to its shareholders and highlights its stable financial standing in the titanium dioxide industry.
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.