SLVYY - Solvay's Businesses Aren't That Well Positioned But Market Might Be Too Harsh
2023-05-01 03:00:20 ET
Summary
- Solvay has a lot of automotive and aerospace exposure, and while aerospace is coming back online idiosyncratically, automotive is more at risk in the medium term.
- They are doing a separation of its businesses which we think is not a meaningful catalyst and a waste of time.
- While we don't see them being especially well positioned, they've shown their mettle in the past. Also, they are very low multiple and have a decent dividend.
- However, the exposures subject to the most likely incremental declines are also the biggest profit contributors.
- Still, their valuation relative to other quite specialty-focused players in similar end-markets makes them compelling (like Evonik), and aerospace is now an asset rather than a liability as during COVID-19.
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Solvay's Businesses Aren't That Well Positioned, But Market Might Be Too Harsh