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Quaker Chemical (KWR)
NYSE:KWR
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Quaker Chemical
(NYSE:KWR)
68Neutral
Quaker Chemical (KWR) vs. S&P 500 (SPY)
Market Cap
$2.22B
Dividend Yield1.5%
Average Volume (3M)162.10K
Price to Earnings (P/E)19.3
Beta (1Y)1.34
Revenue Growth-5.82%
EPS Growth3.75%
CountryUS
Employees4,400
SectorBasic Materials
Sector Strength59
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)6.50
Shares Outstanding17,671,654
10 Day Avg. Volume176,432
30 Day Avg. Volume162,102
Financial Highlights & Ratios
PEG Ratio5.14
Price to Book (P/B)N/A
Price to Sales (P/S)1.24
Price to Cash Flow (P/CF)9.10
P/FCF Ratio7.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$169.50Price Target Upside37.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Quaker Chemical Business Overview & Revenue Model
Company DescriptionQuaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications. The company operates through four segments: Americas; Europe, Middle East, and Africa; Asia/Pacific; and Global Specialty Businesses. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, metal finishing fluids, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, can, mining, and metalworking companies. The company was formerly known as Quaker Chemical Products Corporation and changed its name to Quaker Chemical Corporation in August 1962. Quaker Chemical Corporation was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.
How the Company Makes MoneyQuaker Chemical generates revenue primarily through the sale of its specialized chemical products and services to a variety of industrial sectors. The company offers tailored solutions that enhance manufacturing processes and equipment performance, which are critical to its clients' operations. Revenue streams include the direct sale of high-performance fluids and chemical solutions, as well as service agreements for technical support and process optimization. Quaker Chemical's earnings are bolstered by strategic partnerships and long-term contracts with major industrial players, ensuring a steady demand for its customized solutions. The company's global presence and commitment to innovation further support its financial performance by allowing it to leverage emerging market opportunities and address evolving customer needs.
Quaker Chemical Financial Statement Overview
Summary
Quaker Chemical maintains a solid financial position with stable profitability and efficient operational performance. Despite a recent drop in revenue and operating cash flow, the company effectively manages its balance sheet with moderate leverage and strong equity ratios.Income Statement
Quaker Chemical shows a stable income statement with a consistent gross profit margin averaging around 35% over the years. The recent net profit margin slightly increased to 6.3% from 5.8% in the previous year, indicating improved profitability, although revenue has decreased by 5.8% in the last year. The EBIT and EBITDA margins demonstrate strong operational efficiency, with EBIT at 10.6% and EBITDA at 10.6% for the current year.75
Positive
Balance Sheet
The company's balance sheet is relatively stable, with a debt-to-equity ratio around 0.54, suggesting moderate leverage. Return on Equity (ROE) shows improvement, rising to 8.6% from 8.1%, indicating effective use of equity to generate profits. The equity ratio is slightly over 50%, reflecting a balanced financial structure with a good proportion of assets financed by equity.70
Positive
Cash Flow
Quaker Chemical's cash flow statement indicates a decrease in operating cash flow from $279 million to $204 million, suggesting challenges in cash generation. However, the free cash flow remains strong, with a slight decrease from $240 million to $215 million. The operating cash flow to net income ratio is healthy, indicating that cash flow from operations is adequately supporting net income.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.84B | 1.95B | 1.94B | 1.76B | 1.42B | Gross Profit |
| 686.03M | 705.64M | 612.65M | 594.64M | 513.44M | EBIT |
| 194.71M | 214.50M | 144.64M | 150.47M | 127.07M | EBITDA |
| 194.71M | 290.11M | 239.42M | 253.22M | 138.74M | Net Income Common Stockholders |
| 116.64M | 112.75M | -17.81M | 121.37M | 39.66M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 188.88M | 194.53M | 180.96M | 165.18M | 181.83M | Total Assets |
| 2.61B | 2.71B | 2.82B | 2.96B | 2.89B | Total Debt |
| 727.20M | 788.97M | 979.77M | 919.68M | 915.11M | Net Debt |
| 538.32M | 594.44M | 798.81M | 754.51M | 733.27M | Total Liabilities |
| 1.26B | 1.33B | 1.54B | 1.57B | 1.57B | Stockholders Equity |
| 1.35B | 1.38B | 1.28B | 1.39B | 1.32B |
| Cash Flow | Free Cash Flow | |||
| 215.86M | 240.22M | 13.26M | 27.48M | 160.49M | Operating Cash Flow |
| 204.58M | 279.02M | 41.79M | 48.93M | 178.39M | Investing Cash Flow |
| -76.42M | -27.62M | -40.19M | -49.13M | -71.39M | Financing Cash Flow |
| -122.66M | -238.61M | 24.67M | -13.46M | -75.25M |
Quaker Chemical Technical Analysis
Negative
123.61
Price Trends
136.30
Negative
143.86
Negative
154.80
Negative
Market Momentum
-2.81
Positive
32.67
Neutral
27.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KWR, the sentiment is Negative. The current price of 123.61 is below the 20-day moving average (MA) of 131.34, below the 50-day MA of 136.30, and below the 200-day MA of 154.80, indicating a bearish trend. The MACD of -2.81 indicates Positive momentum. The RSI at 32.67 is Neutral, neither overbought nor oversold. The STOCH value of 27.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KWR.
Quaker Chemical Risk Analysis
Quaker Chemical disclosed 28 risk factors in its most recent earnings report. Quaker Chemical reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Quaker Chemical Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.17B | 18.67 | 21.49% | ― | 1.77% | 47.48% | |
77 Outperform | $14.67B | 22.54 | 25.61% | 1.70% | 0.12% | 24.30% | |
75 Outperform | $10.05B | 11.34 | 16.11% | 3.74% | 1.91% | 2.94% | |
68 Neutral | $2.22B | 19.29 | 8.49% | 1.50% | -5.82% | 3.75% | |
61 Neutral | $2.97B | 27.59 | 6.35% | 1.62% | 0.99% | -27.62% | |
57 Neutral | $2.78B | 21.03 | 0.18% | 2.75% | -4.35% | -115.63% | |
47 Neutral | $2.65B | -3.07 | -22.25% | 3.27% | 3.70% | -29.53% |
* Basic Materials Sector Average
Performance Comparison
KWR
Quaker Chemical
123.61
-76.89
-38.35%
ASH
Ashland
59.29
-35.96
-37.75%
EMN
Eastman Chemical
88.11
-8.86
-9.14%
FUL
H.B. Fuller Company
56.12
-21.86
-28.03%
RPM
RPM International
115.68
-0.71
-0.61%
AXTA
Axalta Coating Systems
33.17
-1.23
-3.58%
Quaker Chemical Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -12.17% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
Quaker Houghton demonstrated resilience and strategic focus in a challenging market environment, with stable volumes and strong cash flow supporting growth initiatives. However, the decline in sales and gross margins, particularly in the EMEA and Americas segments, highlights ongoing market challenges. The company's strategic actions and long-term growth outlook provide a positive counterbalance to current market headwinds.Highlights
Stable Performance in Challenging Markets
Despite a 5% decline in net sales to $444 million in Q4, Quaker Houghton's volumes were consistent due to market share gains. The company outperformed challenging end markets with stable volumes over nine quarters.
Strong Cash Flow and Capital Allocation
In 2024, Quaker Houghton generated $205 million in operating cash flow, enabling investments in organic growth, increased dividends, debt repayment, two acquisitions, and $50 million in share repurchases.
Strategic Expansion and Globalization
Quaker Houghton expanded its market presence with investments in regions like India, Southeast Asia, and China. The acquisition of Chemical Solutions & Innovations in South Africa supports growth in emerging geographies.
Cost Management and Operational Efficiency
Identified $20 million of cost actions expected to drive $15 million of savings in 2025, along with ongoing procurement and manufacturing improvements.
Positive Long-term Outlook
End markets expected to grow 1% to 2% in 2025, driven by increased production at new steel and aluminum mills, with expected revenue, adjusted EBITDA, and earnings growth.
Lowlights
Revenue Decline and Currency Impact
Net sales declined by 5% in Q4, with a 2% unfavorable impact from foreign exchange. Selling price and product mix were 4% lower due to index-based contracts and product mix changes.
Gross Margin Challenges
Gross margins fell to 35.2% in Q4, impacted by manufacturing absorption, raw material cost increases, and product mix shifts, particularly in the Americas and EMEA.
Weakness in EMEA and Americas Segments
EMEA and Americas segments saw a decline in net sales by 7% and 8% respectively, due to lower selling prices, product mix, foreign exchange, and sales volumes.
Market and Economic Uncertainty
End market conditions weakened further in 2024, with softness in industrial and automotive applications, creating a challenging environment for growth.
Company Guidance
In the recent earnings call, Quaker Houghton provided guidance reflecting a challenging but optimistic outlook for 2025. The company reported fourth-quarter net sales of $444 million, representing a 5% decline from the previous year, or 3% on a constant currency basis. Despite these declines, Quaker Houghton maintained stable volumes due to market share gains, driven by their targeted 2% to 4% range of net new business wins. Gross margins were reported at 35.2% for the quarter, impacted by factors such as manufacturing absorption and raw material cost increases, with expectations of sequential improvement in the first quarter of 2025. The company generated $65 million in adjusted EBITDA for the fourth quarter and $311 million for the full year, alongside $205 million in operating cash flow. Looking forward, Quaker Houghton anticipates a modest 1% to 2% growth in end markets in 2025, with revenue, adjusted EBITDA, and earnings growth expected as macroeconomic conditions improve, particularly in the second half of the year. The company also plans to implement $20 million in cost actions, with $15 million of in-year savings anticipated.Quaker Chemical Corporate Events
Executive/Board Changes
Quaker Chemical Grants Long-Term Incentive Awards
Neutral
Dec 17, 2024
Quaker Chemical Corporation’s Compensation and Human Resources Committee has granted long-term incentive equity compensation awards to its executives, Tom Coler and Jeewat Bijlani, in the form of restricted stock units (RSUs) under its Long-Term Performance Incentive Plan. These RSUs are subject to a performance modifier based on the company’s total shareholder return relative to the S&P 1500 Chemicals Index, with vesting adjustments ranging from 75% to 125% of the target number, depending on performance over a three-year period.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.