BMO Capital Markets analyst Bhavesh Lodaya initiated coverage of Element Solutions Inc ESI with an Outperform rating and a price target of $23.
The analyst is bullish on the company's diversified yet complementary offerings, low capital intensity, and high cash flow generation.
Lodaya expects the company's higher-margin platforms to benefit from notable end-market recovery over the mid-long term.
The analyst expects ESI to exceed its base growth algorithm in the near/ mid-term, benefiting from multiple factors such as the proliferation of 5G handsets and base stations, semis recovery, and increasing share of EVs/power blocks and accelerating automation/electronics in ICE/hybrid vehicles.
The analyst expects the company's FCF to support acquisitions and shield the business during tough times.
Lodaya projects revenue of $2.46 billion and EPS of $1.38 (consensus: $1.39) in 2023, $2.62 billion and $1.57 (consensus: $1.56) in 2024, and $2.72 billion and $1.78 (consensus: $1.75) in 2025.
Also Read: Entegris Terminates Distribution Deal With Element Solutions Unit In Exchange For $200M
Price Action: ESI shares are trading lower by 0.77% at $18.80 on the last check Tuesday.
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