Solstice Advanced Materials' Element Solutions Acquisition to Boost Cash Flow Return on Investment, UBS Says
Solstice Advanced Materials' (SOLS) planned acquisition of Element Solutions (ESI) should boost margins, asset turns, and cash flow return on investment, UBS Securities said in a note emailed Wednesday.UBS said it used its HOLT economic return framework to assess certain metrics of the companies and the resulting merged entity from their merger. Based on this assessment, UBS said the acquisition serves as a "robust value creation potential" for Solstice that would help push its transaction economic profit to more than $1.1 billion by 2030 from over $400 million in recent years."We see a significant upward skew to SOLS stock at current levels," UBS added, noting growth drivers within refrigerants, electronics, and defense.UBS Securities maintained its buy rating and $78 price target on Solstice Advanced Materials.Price: $61.60, Change: $+1.52, Percent Change: +2.53%
