The average target price of SOLV.BR is 159 and suggests 79% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 160.0. This translates into 80% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 139.5. This suggests 57% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Solvac S.A. operates as an advanced materials and specialty chemicals company in Belgium. The company offers specialty polymers, composite materials, soda ash, peroxides, and silica. Solvac S.A. was incorporated in 1983 and is headquartered in Brussels, Belgium.

Belgium

Solvac S.A.

Basic Materials

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded most of its peers. On average, the company pays dividends twice a year. 

SOLV.BR reported revenue of EUR 0mn in the last 12 months, down 100% from FY22. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 0% from FY22 to EUR 21 375 032.56. Market expects EPS to reach EUR 0.00 in FY24.

The stock's performance has been mixed in the past six months, with growth following a decline. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 8ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 5ppts over six months and grew 3ppts faster in the past month. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.9 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SOLV.BR has average trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity is usually quite stable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, and inadequate interest coverage. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, SOLV.BR is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, SOLV.BR is not volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will stay within a narrow range. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Based on key historical and expected multiples, the stock is undervalued relative to its peers. Specifically, the stock is fairly valued on P/E. 

Solvac S.A.

€ 89.4

6

Solvac S.A.

€ 89.4

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 89.4

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