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Arkema (ARKAY) Finalizes 54% Stake Buy in PI Advanced Materials
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Arkema S.A. (ARKAY - Free Report) finalized the acquisition of Glenwood Private Equity's 54% stake in PI Advanced Materials (PIAM), a South Korea-based company. This move aligns with Arkema's objective to enhance its portfolio of cutting-edge technologies catering to the burgeoning markets of advanced electronics and electric mobility.
PIAM commands a significant global market share exceeding 30%, establishing itself as the world leader in polyimide films. These films play a crucial role in high-value markets such as mobile devices and electric vehicles.
Anticipating robust growth, PIAM is projected to achieve an annual sales increase of approximately 13% in the upcoming years. The upside is propelled by the adoption of innovative applications in 5G antennas, high-resolution OLED displays, flexible screens and electric vehicles. Recent capacity expansions further bolster PIAM's position in the market.
The integration of PIAM's portfolio into Arkema's array of high-performance polymers fortifies the company's standing in the industry. The geographical synergy between the two entities is expected to yield substantial benefits, with estimated synergies reaching €30 million ($32.6 million) in terms of EBITDA over the next five years. The acquisition, based on a €728 million ($791.7 million) enterprise value, grants Arkema a controlling 54% stake in PIAM, which will be fully consolidated in Arkema's accounts.
Arkema, leveraging its profound expertise in materials science, is committed to providing top-tier technologies to meet the escalating demand for new and sustainable materials. As part of its 2024 vision to become a pure player in Specialty Materials, the company operates within three complementary and innovative segments — Adhesive Solutions, Advanced Materials and Coating Solutions — contributing to 91% of the Group's sales in 2022. Also, Arkema maintains a competitive Intermediates segment.
Shares of Arkema have gained 11% in the past year against a 14.5% fall of the industry.
Image Source: Zacks Investment Research
Despite challenging economic conditions with low market volumes and global uncertainties, Arkema is prioritizing controllable factors like cost management, optimized working capital and ongoing technological advancements with partners as the year concludes. It is committed to completing pivotal projects contributing to its growth in 2024, such as the bio-based plant in Singapore, HF supply in the United States, Sartomer photocure resins development in China and finalizing the HFO-1233zd project in the United States. Arkema maintains its EBITDA forecast of approximately €1.5 billion ($1.63 billion) in 2023, supported by resilient product lines and ongoing cost-saving initiatives, with a targeted high EBITDA to cash conversion of around 40%.
The consensus estimate for AXTA’s current year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.7%. The company’s shares have increased 19.3% in the past year.
The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised upward by 5.1% in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 39.6% in a year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating year-over-year growth of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 48.2% in the past year.
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Arkema (ARKAY) Finalizes 54% Stake Buy in PI Advanced Materials
Arkema S.A. (ARKAY - Free Report) finalized the acquisition of Glenwood Private Equity's 54% stake in PI Advanced Materials (PIAM), a South Korea-based company. This move aligns with Arkema's objective to enhance its portfolio of cutting-edge technologies catering to the burgeoning markets of advanced electronics and electric mobility.
PIAM commands a significant global market share exceeding 30%, establishing itself as the world leader in polyimide films. These films play a crucial role in high-value markets such as mobile devices and electric vehicles.
Anticipating robust growth, PIAM is projected to achieve an annual sales increase of approximately 13% in the upcoming years. The upside is propelled by the adoption of innovative applications in 5G antennas, high-resolution OLED displays, flexible screens and electric vehicles. Recent capacity expansions further bolster PIAM's position in the market.
The integration of PIAM's portfolio into Arkema's array of high-performance polymers fortifies the company's standing in the industry. The geographical synergy between the two entities is expected to yield substantial benefits, with estimated synergies reaching €30 million ($32.6 million) in terms of EBITDA over the next five years. The acquisition, based on a €728 million ($791.7 million) enterprise value, grants Arkema a controlling 54% stake in PIAM, which will be fully consolidated in Arkema's accounts.
Arkema, leveraging its profound expertise in materials science, is committed to providing top-tier technologies to meet the escalating demand for new and sustainable materials. As part of its 2024 vision to become a pure player in Specialty Materials, the company operates within three complementary and innovative segments — Adhesive Solutions, Advanced Materials and Coating Solutions — contributing to 91% of the Group's sales in 2022. Also, Arkema maintains a competitive Intermediates segment.
Shares of Arkema have gained 11% in the past year against a 14.5% fall of the industry.
Image Source: Zacks Investment Research
Despite challenging economic conditions with low market volumes and global uncertainties, Arkema is prioritizing controllable factors like cost management, optimized working capital and ongoing technological advancements with partners as the year concludes. It is committed to completing pivotal projects contributing to its growth in 2024, such as the bio-based plant in Singapore, HF supply in the United States, Sartomer photocure resins development in China and finalizing the HFO-1233zd project in the United States. Arkema maintains its EBITDA forecast of approximately €1.5 billion ($1.63 billion) in 2023, supported by resilient product lines and ongoing cost-saving initiatives, with a targeted high EBITDA to cash conversion of around 40%.
Arkema SA Price and Consensus
Arkema SA price-consensus-chart | Arkema SA Quote
Zacks Rank & Key Picks
Arkema currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Axalta Coating Systems Ltd. (AXTA - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Andersons Inc. (ANDE - Free Report) and Alamos Gold Inc. (AGI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for AXTA’s current year earnings is pegged at $1.58, indicating year-over-year growth of 6.8%. AXTA beat the Zacks Consensus Estimate in three of the last four quarters and missed one, with the average earnings surprise being 6.7%. The company’s shares have increased 19.3% in the past year.
The Zacks Consensus Estimate for ANDE’s current-year earnings has been revised upward by 5.1% in the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 32.8% on average. ANDE’s shares have rallied around 39.6% in a year.
The consensus estimate for Alamos’ current fiscal year earnings is pegged at 53 cents, indicating year-over-year growth of 89.3%. AGI beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have increased 48.2% in the past year.