Solstice Advanced Materials Inc. (SOLS)

Price$63.73Cached quoteAs of 2026-09-05 02:54 UTC

AI: Fair-priced

Price checkThe shares look roughly fair, pricing in strong growth without leaving a wide safety margin.

Solstice is valued at about 22 times the midpoint of 2026 adjusted earnings guidance of $2.75 to $2.95 per share. Using roughly 159 million shares and about $1.24 billion of net debt, enterprise value, meaning stock-market value plus net debt, is about 11 times guided adjusted operating profit before interest, taxes, depreciation and amortization. That valuation can work if growth continues and margins recover, but it does not offer a large discount against weaker recent profitability and uneven cash generation.

Big pictureSales are growing again, but profit margins and cash generation still need more proof.

Solstice revenue rose from $3.65 billion in 2023 to $3.89 billion in 2025, while net income fell from $621 million to $237 million and operating cash flow declined from $760 million to $455 million. The first half of 2026 improved, with sales up 11% to about $2.14 billion and free cash flow, cash left after running and investing in the business, of $248 million. However, adjusted operating profit declined 6% as refrigerant margins weakened, so stronger sales have not yet produced consistently stronger profits.

Business strengthThe balance sheet is manageable, and the canceled merger sharply reduced dilution and leverage risk.

At June 30, Solstice held about $750 million of cash against roughly $2.0 billion of debt, leaving about $1.24 billion of net debt. Current assets exceeded current liabilities by about $808 million. The balance sheet had already been reshaped by roughly $2.0 billion of 2025 borrowing and a $1.5 billion dividend to Honeywell. Shares outstanding remained near 159 million. Canceling the Element Solutions transaction avoided planned ownership of about 44% for Element shareholders, while the new $500 million repurchase authorization could reduce dilution if executed at sensible prices.

What could change the storyFaster growth with stable margins would justify the price; weaker margins would quickly expose it.

The strongest bull evidence is broad second-quarter growth: Solstice refrigerants rose 13%, nuclear sales 28%, electronic materials 14%, and healthcare packaging 24% from a year earlier. The bear evidence is that Refrigerants and Applied Solutions margin fell to 32.9% from 39.4%, while first-half segment operating profit declined despite higher sales. The current valuation depends on raised 2026 guidance being achieved and margins stabilizing. Sustained annualized free cash flow near $500 million or better would strengthen the case; continued margin compression or materially weaker cash generation would weaken it.

AI: News

Merger canceled, buyback launchedCanceling the Element deal removed a major financing overhang and added a meaningful share buyback.

On August 27, 2026, Solstice and Element Solutions mutually terminated their planned transaction with no termination fee. Solstice also authorized up to $500 million of share repurchases and reaffirmed its third-quarter and full-year guidance. Reuters reported that Solstice shares rose sharply after hours. The cancellation removed the proposed bridge financing and substantial new share issuance, while the repurchase authorization shifted capital allocation back toward the standalone company and its existing shareholders.

Element deal announcedThe proposed Element acquisition raised growth ambitions but added major debt, dilution, and integration concerns.

On July 6, 2026, Solstice agreed to acquire Element Solutions in a transaction valued at about $14.5 billion including assumed debt. Element shareholders were expected to receive cash plus Solstice shares and own about 44% of the combined company, while Solstice arranged an initial $4.7 billion bridge financing. Management targeted more than $180 million of annual cost savings. Reuters reported that Solstice shares fell nearly 13% that day, consistent with investor concern about leverage, dilution and integration, although one-day price moves can have multiple causes.

Guidance raised after strong quarterSecond-quarter growth beat expectations and management raised full-year targets, supporting the standalone bull case.

On July 30, 2026, Solstice reported second-quarter sales of $1.148 billion, up 11%, adjusted earnings of $0.88 per share and adjusted operating profit of $290 million. First-half free cash flow was $248 million. Management raised 2026 guidance to sales of $4.125 billion to $4.185 billion, adjusted operating profit of $1.035 billion to $1.055 billion and adjusted earnings of $2.75 to $2.95 per share. The shares finished higher that session, though timing alone does not prove the earnings release caused the move.

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Revenue

2022

2023

2024

2025

Net income

2022

2023

2024

2025

Free cash flow

2022

2023

2024

2025

Total cash / debt

CashTotal debt

2023

2024

2025

Financial statements

	2025	2024	2023	2022
Revenue	$3.89B	$3.77B	$3.65B	$3.59B
Gross profit	$1.25B	$1.31B	$1.28B	$1.40B
Gross margin	32.17%	34.64%	35.16%	39.11%
Research & development	$97.0M	$83.0M	$81.0M	$79.0M
Operating expenses	$518.0M	$475.0M	$459.0M	$436.0M
Operating income	$732.0M	$831.0M	$824.0M	$967.0M
Operating margin	18.84%	22.04%	22.58%	26.96%
EBITDA	$895.0M	$1.03B	$1.05B	$1.12B
EBITDA margin	23.03%	27.24%	28.80%	31.14%
Net income	$237.0M	$594.0M	$621.0M	$718.0M
Net profit margin	6.10%	15.76%	17.02%	20.02%
Basic EPSper basic share	$1.49	$3.74	$3.91	$4.52
Diluted EPSper diluted share	$1.49	$3.74	$3.91	$4.52

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Owners

Reported shareholders

Reference date Jun 30, 2026

10.03%of listed shares

BlackRock, Inc.15.93M shares · Jun 30, 2026

View holders

Top 20 reported holders of SOLS
Holder	% owned
BlackRock, Inc.	10.03%15.93M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	5.00%7.94M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.52%7.17M shares
STATE STREET CORP	3.19%5.06M shares
PRICE T ROWE ASSOCIATES INC /MD/	2.23%3.54M shares
TWO SIGMA INVESTMENTS, LP	2.11%3.36M shares
GEODE CAPITAL MANAGEMENT, LLC	2.07%3.29M shares
GOLDMAN SACHS GROUP INC	1.81%2.88M shares
MORGAN STANLEY	1.78%2.83M shares
Castle Hook Partners LP	1.40%2.23M shares
UBS Group AG	1.39%2.21M shares
NORGES BANK	1.38%2.2M shares
XN LP	1.36%2.16M shares
JANE STREET GROUP, LLC	1.35%2.15M shares
FMR LLC	1.14%1.81M shares
BANK OF AMERICA CORP /DE/	1.09%1.73M shares
MARSHALL WACE, LLP	1.05%1.67M shares
CHARLES SCHWAB INVESTMENT MANAGEMENT INC	1.05%1.67M shares
RAYMOND JAMES FINANCIAL INC	0.98%1.56M shares
BNP PARIBAS FINANCIAL MARKETS	0.98%1.55M shares