Core Viewpoint - Avient Corporation reported its fourth-quarter and full-year results for 2025, highlighting a 6% increase in adjusted EPS and a positive outlook for 2026 with projected earnings growth despite mixed demand conditions. Financial Performance - Full-year 2025 adjusted EPS was $2.82, a 6% increase from the previous year, driven by an adjusted EBITDA margin expansion of 50 basis points to 16.7% and lower interest expenses [1] - Fourth-quarter adjusted EPS was $0.56, reflecting a 14% growth year-over-year, primarily due to organic sales growth in the Specialty Engineered Materials segment and productivity initiatives [1] - Full-year sales for 2025 increased by 1% to $3,260 million, with fourth-quarter sales rising 2% to $761 million; foreign exchange positively impacted sales by 3% in Q4 and 1% for the full year [1] Debt Management and Cash Flow - The company generated strong operating cash flow of $302 million in 2025, which supported a debt repayment of $150 million during the year [1] - Avient expects to deliver free cash flow exceeding $200 million in 2026, enhancing its flexibility for future cash deployment [1] 2026 Financial Guidance - For 2026, Avient projects adjusted EPS to range from $2.93 to $3.17, indicating a growth of 4% to 12% over 2025 [1] - The company anticipates adjusted EBITDA for 2026 to be between $555 million and $585 million, representing a growth of 2% to 7% [1] Strategic Focus - The management emphasized a commitment to driving profitable mix and productivity, which contributed to the adjusted EBITDA margin expansion and overall financial performance [1] - Continued investments in prioritized growth areas and a robust innovation pipeline are part of the strategy to maintain earnings and margin growth into 2026 [1]

Sales Performance - Fourth quarter sales increased by 2% to $761 million, while full-year sales rose by 1% to $3,260 million, with foreign exchange contributing a favorable impact of 3% in Q4 and 1% for the full year [4]. - Sales for Q4 2025 reached $760.6 million, a slight increase from $746.5 million in Q4 2024, while total sales for the year were $3,260.2 million compared to $3,240.4 million in 2024, reflecting a year-over-year growth of 0.6% [24]. - Total sales for Q4 2025 reached $760.6 million, a 1.9% increase from $746.5 million in Q4 2024 [33]. Earnings and EPS - Full-year 2025 GAAP EPS was $0.89, down from $1.84 in the prior year, while adjusted EPS increased by 6% to $2.82 compared to $2.66 in 2024 [3][4]. - Fourth quarter adjusted EPS of $0.56 represents a 14% growth year-over-year, driven by organic sales growth in the Specialty Engineered Materials segment [4]. - Earnings per share (EPS) for Q4 2025 was $0.18, down from $0.53 in Q4 2024, with diluted EPS for the year at $0.89 compared to $1.84 in 2024, reflecting a decline of 51.6% [24]. - The first quarter adjusted EPS is projected to be $0.81, reflecting a 7% increase compared to the prior year quarter [8]. - For 2026, adjusted EPS is projected to range from $2.93 to $3.17, indicating a growth of 4% to 12% over 2025 [4][8]. Cash Flow and Capital Expenditures - The company generated strong operating cash flow of $302 million for the full year 2025, which supported debt repayment of $150 million [4]. - Net cash provided by operating activities for the year was $301.6 million, compared to $256.8 million in 2024, reflecting an increase of 17.4% [30]. - Capital expenditures for 2025 were $106.6 million, down from $121.9 million in 2024, indicating a reduction of 12.5% [30]. - The company expects to deliver free cash flow exceeding $200 million in 2026, providing greater flexibility for future cash deployment [8]. Profitability Metrics - Adjusted EBITDA margin expanded by 50 basis points to 16.7% for the full year 2025, supported by productivity initiatives [4][6]. - The full-year adjusted EBITDA is expected to be between $555 million and $585 million, representing a growth of 2% to 7% [8]. - Adjusted gross margin as a percentage of sales improved to 32.3% in Q4 2025, compared to 31.6% in Q4 2024 [35]. - Adjusted operating income for Q4 2025 was $73.0 million, up from $65.2 million in Q4 2024, representing a 2.3% increase in operating margin [35]. - Adjusted EBITDA for the year ended 2025 was $544.6 million, compared to $526.4 million in 2024, indicating a 3.9% year-over-year growth [35]. Income and Expenses - Net income attributable to Avient common shareholders for Q4 2025 was $16.9 million, significantly lower than $48.3 million in Q4 2024, with annual net income at $81.9 million compared to $169.5 million in 2024, a decrease of 51.7% [24]. - Operating income for the year ended 2025 was $203.5 million, down from $329.3 million in 2024 [33]. - Selling and administrative expenses increased to $190.0 million in Q4 2025 from $173.9 million in Q4 2024 [33]. - The company reported a net loss attributable to common shareholders of $20.2 million for Q1 2025, with an adjusted net income of $70.0 million [35]. Special Items and Restructuring - The company reported special items impacting net income, with a total impact of $(19.3) million for Q4 2025, compared to $18.0 million in Q4 2024, highlighting the financial restructuring efforts [26]. - Special items before tax for Q4 2025 amounted to $24.3 million, compared to a negative $23.9 million in Q4 2024 [35]. Asset and Liability Overview - Total assets as of December 31, 2025, were $6,025.6 million, up from $5,811.1 million in 2024, representing an increase of 3.7% [28]. - Total liabilities increased to $3,639.3 million in 2025 from $3,481.5 million in 2024, indicating a rise of 4.5% [28].

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Summary of the Conference Call Transcript Industry Overview - The report focuses on the **Chinese Chemical Distribution Industry** and highlights a **lull in demand** ahead of the **Lunar New Year**. - **January sales** for chemicals increased by approximately **3% year-over-year**, with chemicals outperforming paints. [1][19] - New orders for chemicals are modestly higher, while orders for paints remain flat, indicating a greater **inventory risk** in the paints sector. [1][19] Key Insights - **Cyclical confidence** has softened, suggesting that sales acceleration has likely bottomed out before the Lunar New Year. [1][19] - Manufacturing sectors, particularly **electronics and appliances**, are noted as a bright spot in the current market. [1][19] - The survey covered regional distributors in major cities such as **Shanghai, Wuxi, Changzhou, Nanjing, Linyi, and Qingdao**, representing a population of around **70 million** and targeting industrial activity in provinces with approximately **550 million** people. [19] Sales and Inventory Trends - Sales expectations are muted, with **Nanjing** showing the strongest trend and **Changzhou & Wuxi** exhibiting the weakest. [19] - The **order-to-inventory ratio** is lower, indicating that inventories are outpacing orders, which could lead to potential overstock issues. [4][10] - The **sales acceleration** for the upcoming month is expected to be muted, reflecting a cautious outlook among distributors. [4][10] Market Outlook - The overall market outlook for **hardware & tools** and **electronics & appliances** is flat, with over **50%** of respondents indicating stronger demand expected next month. [4][21] - The **paint end-market outlook** shows a decline in growth compared to previous surveys, with various sectors such as construction and electronics reporting weaker performance. [25] Company-Specific Insights - Companies with significant Asian footprints include **Albemarle (ALB)**, **Air Products (APD)**, and **3M (MMM)**, among others, with varying percentages of sales derived from the region. [6] - The report includes a list of companies rated by Jefferies, with recommendations ranging from **Buy** to **Hold** based on their performance and market conditions. [47][50] Conclusion - The Chinese chemical distribution market is currently experiencing a slowdown in demand, particularly in the paints sector, while manufacturing in electronics shows some resilience. - The cautious outlook and muted sales expectations suggest potential risks for companies heavily reliant on this market, necessitating close monitoring of inventory levels and order trends. [1][19][25]

Core Viewpoint - The analysis compares Avient (AVNT) and Air Products and Chemicals (APD) to determine which stock represents a better value opportunity for investors interested in the Chemical - Diversified sector [1]. Group 1: Zacks Rank and Earnings Estimates - Avient currently holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Air Products and Chemicals has a Zacks Rank of 4 (Sell), suggesting a less favorable earnings outlook [3]. - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, which positions AVNT as having a more favorable earnings outlook compared to APD [3]. Group 2: Valuation Metrics - Avient has a forward P/E ratio of 12.40, significantly lower than Air Products and Chemicals' forward P/E of 20.37, indicating that AVNT may be undervalued relative to APD [5]. - The PEG ratio for Avient is 1.25, while for Air Products and Chemicals, it is 2.60, suggesting that AVNT is expected to grow earnings at a more favorable rate relative to its price [5]. - Avient's P/B ratio stands at 1.44, compared to APD's P/B of 3.39, further indicating that AVNT is trading at a lower valuation relative to its book value [6]. - Based on these valuation metrics, Avient holds a Value grade of A, while Air Products and Chemicals has a Value grade of C, reinforcing the view that AVNT is the better investment option at this time [6].

Core Insights - The article emphasizes the importance of value investing and highlights Avient (AVNT) as a strong candidate for value investors due to its favorable valuation metrics [2][8]. Valuation Metrics - Avient (AVNT) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - The stock's P/E ratio is 11.51, significantly lower than the industry average of 21.71, suggesting it may be undervalued [4]. - AVNT's PEG ratio stands at 1.12, compared to the industry's average of 2.32, indicating a favorable growth outlook relative to its valuation [5]. - The P/B ratio for AVNT is 1.36, which is attractive compared to the industry average of 1.55, further supporting the notion of undervaluation [6]. - The P/CF ratio for AVNT is 10.71, well below the industry's average of 25.16, highlighting its strong cash flow position [7]. Investment Outlook - The combination of these metrics suggests that Avient is likely undervalued and stands out as one of the strongest value stocks in the market, particularly given its positive earnings outlook [8].

Core Insights - The SCCM Small Cap Value Equity Strategy reported a strong performance in Q3 2025, with a gross return of 14.4% and a net return of 14.2%, outperforming the Russell 2000 and Russell 2000 Value indices which returned 12.4% and 12.6% respectively [1] - The positive performance was attributed to Fed rate cuts, economic resilience, and increased investor risk appetite [1] Company Analysis: Avient Corporation (NYSE:AVNT) - Avient Corporation is a global provider of specialized polymer materials, colorants, composites, and additives, serving key markets such as packaging, healthcare, defense, and industrial manufacturing [3] - The company has transitioned from a commodity materials business to a higher-margin specialty formulator through strategic acquisitions and divestitures, focusing on sustainability and advanced material innovation [3] - Avient's execution is supported by cost discipline, productivity initiatives, and an increasing mix of recurring and value-added revenue streams [3] - The company benefits from exposure to resilient sectors like healthcare and defense, providing stability, while also seeing cyclical upside from demand recovery in packaging and industrial applications [3] - Management is focused on mix improvement, margin expansion, and deleveraging through operational excellence and targeted capital allocation [3] - Avient is investing in next-generation materials aligned with long-term trends in electrification, lightweighting, and circular manufacturing [3] - With a stronger balance sheet, expanding free cash flow, and a structurally improved earnings profile, Avient is positioned to compound value and outperform traditional chemical peers in the upcoming cycle [3] Stock Performance - Avient Corporation's stock had a one-month return of 10.15% but experienced a significant decline of 44.21% over the last 52 weeks [2] - As of November 24, 2025, Avient's stock closed at $29.29 per share, with a market capitalization of $2.682 billion [2]

Core Insights - The article promotes a live video series called the Underdog Daily Dividend Show, which features potential portfolio candidates for investors [1] - The show is hosted by Fredrik Arnold and takes place around 10 AM on every NYSE trading day [1] - The article encourages audience engagement by inviting comments on favorite or curious stock tickers for future reports [1] Company and Industry Summary - The Dividend Dogcatcher is a platform that provides information on dividend stocks and investment opportunities [1] - The focus is on identifying underperforming stocks that may offer sustainable dividends, appealing to income-focused investors [1] - The initiative aims to create a community around dividend investing, enhancing interaction and information sharing among investors [1]

Sales Performance - Sales decreased by $8.7 million, or 1.1%, in Q3 2025 compared to Q3 2024, with a 2.9% decline excluding foreign exchange impacts[71] - For the nine months ended September 30, 2025, sales increased by $5.7 million, or 0.2%, with a 0.2% decline excluding foreign exchange impacts[72] - Sales in the Color, Additives and Inks segment decreased by $11.6 million, or 2.2%, in Q3 2025, while the Specialty Engineered Materials segment saw an increase of $3.1 million, or 1.1%[84][88] Gross Margin and Operating Income - Gross margin as a percentage of sales was 30.4% for Q3 2025, down from 32.1% in Q3 2024, primarily due to higher environmental remediation and restructuring charges[73] - Operating income decreased by $10.1 million, or 13.1%, in Q3 2025 compared to Q3 2024, and decreased by $79.8 million, or 32.7%, for the nine months[83] - Operating income for the Specialty Engineered Materials segment decreased by $8.0 million for the nine months ended September 30, 2025, due to higher operating costs[90] Expenses - Selling and administrative expenses decreased by $6.4 million in Q3 2025 but increased by $68.6 million for the nine months, mainly due to an impairment charge related to the S/4HANA project[76] - Corporate costs increased by $9.3 million in Q3 2025, primarily due to higher environmental remediation and restructuring charges[91] - Corporate costs increased by $78.1 million for the nine months ended September 30, 2025, primarily due to a $71.6 million impairment charge related to the cessation of the S/4HANA development[92] Cash Flow and Liquidity - Net cash provided by operating activities decreased by $0.4 million during the nine months ended September 30, 2025, compared to the same period in 2024, mainly due to higher incentive compensation payments and increased working capital[97] - Net cash used by investing activities was $64.2 million for the nine months ended September 30, 2025, compared to $79.5 million in 2024, reflecting capital expenditures[98] - Net cash used by financing activities was $181.7 million for the nine months ended September 30, 2025, primarily due to $100.2 million in long-term borrowings payments and $74.1 million in dividends paid[98] - As of September 30, 2025, total liquidity was $932.9 million, consisting of $445.6 million in cash and cash equivalents and $487.3 million in revolving credit availability[94] - Approximately 76% of the company's cash and cash equivalents were held outside the United States as of September 30, 2025[94] Debt and Financing - The company made voluntary prepayments of $100.0 million on its senior secured term loan during the nine months ended September 30, 2025[102] - The company refinanced its senior secured term loan on March 12, 2025, reducing the interest rate by 25 basis points[101] - Aggregate maturities of the principal amount of debt total $1,999.1 million, with $621.1 million due in 2029 and $1,376.5 million due thereafter[101] - The company expects to meet cash requirements for the remainder of 2025 through cash on hand, cash from operations, and available liquidity under its revolving credit facility[95] Interest and Tax - Interest expense, net decreased by $2.7 million in Q3 2025, driven by reduced interest rates and $100 million in prepayments on the senior secured term loan[77] - The effective tax rate for Q3 2025 was 23.5%, up from 22.5% in Q3 2024, influenced by jurisdictional earnings mix[78]

Core Insights - Avient reported revenue of $806.5 million for the quarter ended September 2025, reflecting a year-over-year decline of 1.1% and a surprise of -1.82% compared to the Zacks Consensus Estimate of $821.41 million [1] - The earnings per share (EPS) for the same period was $0.70, an increase from $0.65 a year ago, resulting in an EPS surprise of +1.45% against the consensus estimate of $0.69 [1] Revenue Performance - Specialty Engineered Materials sales were $297.7 million, below the four-analyst average estimate of $304.45 million, with a year-over-year change of +1.1% [4] - Color, Additives and Inks sales reached $509.9 million, slightly below the average estimate of $515.47 million, showing a year-over-year decline of -2.2% [4] - Corporate sales reported at -$1.1 million, compared to the two-analyst average estimate of -$1.01 million, indicating a year-over-year change of +22.2% [4] Operating Income Analysis - Operating income for Color, Additives and Inks was $73.8 million, lower than the estimated $77.64 million by four analysts [4] - Operating income for Specialty Engineered Materials was $37.3 million, compared to the average estimate of $38.53 million [4] - Corporate operating loss was reported at -$44 million, significantly worse than the two-analyst average estimate of -$28.85 million [4] Stock Performance - Avient's shares have returned -2.1% over the past month, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]