Solventum (SOLV)
NYSEHealth CareMedical - Instruments & SuppliesSnapshot 2026-09-04
$91.69-0.81%
Close 2026-09-04 · 1-day change
NYSEHealth CareMedical - Instruments & SuppliesSnapshot 2026-09-04
Warn: Primary pillar under pressure — Free cash flow of approximately $200 million in 2026: FCF guidance $200M-$300M vs $200M target.
Solventum aims for steady sales growth of 2% to 3% in 2026. Adjusted EPS is guided between $6.40 and $6.60, showing solid profit growth. The company targets about $200 million in free cash flow for 2026. Its valuation is cheap compared to peers with a P/E of 12.2 versus 28.4 for the sector.
AI disruption fears and litigation risks could hurt earnings. Free cash flow was negative $273 million in Q1, far from the $200 million target. Revenue fell 3% year-over-year in Q1, and guidance was cut. These issues may pressure profit margins and growth.
The price is about 13% below our fair value near $88, reflecting modest 2% revenue growth expected by analysts. Our fair value is slightly below the Street median of $92, indicating the market prices in moderate growth but also some risks.
Breaks if: adjusted EPS falls below $6.40 in FY26
Breaks if: free cash flow remains negative or below $100 million in FY26
Breaks if: organic sales growth falls below 2.0% in FY26
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 in the Healthcare sector. The current thesis state is intact, supported by strong recent financial performance and management's strategic priorities.
The market currently prices SOLV as cheap compared to its peers, with a low expectations gap. There is a justified valuation, indicating that the stock is not overly expensive despite its recent performance.
Fundamentals are likely to show continued organic sales growth, as management aims for 2.0% to 3.0% in 2026. However, there is a moderate risk due to a low probability of missing earnings expectations, despite a recent history of deep misses.
The long-term thesis hinges on management's ability to execute its strategic priorities, particularly the separation of the Health Information Systems business. Additionally, the performance of sector bellwethers and overall economic conditions will be critical factors to monitor.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improved outlook. There are no new threats impacting the thesis at this time.
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.
Overall, SOLV appears to be well-positioned for the next few years, but it faces risks that could impact its trajectory. Not investment advice.