Element Solutions (ESI)
NYSEMaterialsChemicals - SpecialtySnapshot 2026-09-04
$36.01+2.94%
Close 2026-09-04 · 1-day change
NYSEMaterialsChemicals - SpecialtySnapshot 2026-09-04
Broken: Primary pillar broken — Adjusted EBITDA margin >=27.8% in Electronics and Specialties: EBITDA margin 18.3% vs 27.8% target.
Element Solutions grew Electronics sales 15% in 2026-Q1. Total sales rose from $593.7M to $840M. The company is integrating Micromax and EFC acquisitions well. Solstice plans to acquire Element Solutions in a $14.5B deal.
The recent sharp selloff and guidance cut show risks. Leadership changes and executive departures may disrupt plans. Integration of acquisitions could face delays or issues.
The price is about 25% above our fair value near $31. Analysts expect 21% revenue growth. Our fair value is well below the Street median near $50.
Breaks if: integration delays or negative impact reported beyond 2026-Q2
Complete integration of Micromax and EFC acquisitions to realize synergies and support growth.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on growth in the Electronics segment. The current thesis state is intact, supported by strong recent financial performance despite some management challenges.
The market appears to price in a justified valuation, but it is considered expensive compared to peers. There is a low expectations gap, indicating that the current price reflects a balanced view of ESI's prospects.
Fundamentals are likely to continue showing strength, particularly in the Electronics segment, where revenue has grown significantly. However, there is a moderate risk due to recent mixed management priorities and a history of earnings misses.
The long-term thesis hinges on management's ability to execute on growth initiatives and the overall performance of the Materials sector. Key scenarios include the potential impact of inflation and the performance of sector leaders like LIN, SHW, and ECL.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the read on ESI. However, the cancellation of the acquisition by Solstice Advanced Materials threatens its growth strategy.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 2 of last 2 quarters. Management reported successful closing of Micromax and EFC acquisitions in early 2026 and favorable integration progress. Adjusted EBITDA growth includes positive impacts from these acquisitions. The trajectory shows delivering integration and contribution to growth.
“Progress against strategic priorities including the Micromax integration and Kuprion scale up reinforces confidence in long-term trajectory.”
“Micromax and EFC acquisitions closed this quarter; results tracking favorably to original plans; teams settling well.”
Breaks if: margin falls below 26.1% in 2026-Q1
Increase adjusted EBITDA and expand adjusted EBITDA margin through operational excellence and acquisitions.
Stated as a priority in 3 of last 3 quarters. Adjusted EBITDA grew from $136 million in 2025-Q2 to $184 million in 2026-Q2 (35% increase). Adjusted EBITDA margin improved from 26.6% to 27.8% over the same period. Management's statements and financials confirm progress in expanding EBITDA and margins, indicating delivery.
“Adjusted EBITDA of $184 million, an increase of 35% on a reported basis; margin increased to 27.8%.”
“Adjusted EBITDA of $162 million, an increase of 26%; margin increased to 27.8%.”
“Adjusted EBITDA of $136 million, an increase of 5%; margin decreased by 60 basis points to 20.2%.”
Breaks if: organic sales growth falls below 15% YoY in 2026-Q1
Focus on expanding net sales and organic growth in the Electronics segment and total company revenue.
Stated as a priority in 3 of last 3 quarters. Electronics segment revenue grew from approximately $438 million in 2025-Q2 to $767 million in 2026-Q2 (75% increase). Total company revenue increased from $625.2 million to $977.9 million (56% increase) over the same period. Management's statements and financials show delivering growth in Electronics and overall revenue.
“Electronics net sales increased 75% to $767 million, organic net sales increased 20%.”
“Electronics net sales increased 61% to $634 million, organic net sales increased 15%.”
“Electronics net sales increased 21% to $487 million, organic net sales increased 13%.”
Breaks if: acquisition fails to close by mid-2027
Overall, ESI's performance and management execution will be critical in the coming years. Not investment advice.