BMO Capital raised its price target for Tronox Holdings PLC (NYSE:TROX) to $7.00 from $6.50 and maintained a Market Perform rating on the stock. The analyst firm said the adjustment reflects a more constructive supply outlook, even as it judged the overall risk-reward profile to remain neutral.
In reviewing Tronox's most recent quarter, BMO noted that results were broadly consistent with expectations following the company’s pre-announcement. The quarter showed encouraging volume trends, but those gains were partially offset by heightened operating costs. Tronox reported a gross profit margin of 9.28% for the period, and remains unprofitable on a trailing twelve-month basis with an EPS of -$2.97.
BMO emphasized that while supply conditions have improved, demand has not picked up materially. The firm expects Tronox will accept lower reported EBITDA in 2026 as management prioritizes conversion of earnings into free cash flow - a choice that the analyst team views as a deliberate trade-off between short-term earnings metrics and cash generation.
Despite operational headwinds, Tronox's shares have rallied significantly over recent months, with the stock up 87% over the past six months. BMO described the current risk-reward as neutral because, in its view, fundamental indicators have not yet shown a clear, sustained inflection.
Independent valuation analysis referenced by the research note indicates the stock may be trading somewhat above its Fair Value at current prices, according to InvestingPro. That assessment suggests limited upside relative to perceived valuation, supporting BMO's Market Perform stance.
The firm also drew attention to the company's fourth-quarter 2025 financial performance, which included an earnings surprise and revenue beat. Tronox reported an EPS of $0.60 for the quarter, versus forecasts of -$0.30. Revenue for the period came in at $730 million, ahead of the expected $684.28 million. Those results were highlighted as a significant outperformance relative to consensus estimates.
BMO concluded that Tronox continues to manage the elements it can control, and that the improving supply picture is constructive for the business over the longer term. However, because demand remains muted and management is prioritizing cash flow over EBITDA, the firm retained a cautious stance on the near-term upside potential.
For investors seeking additional, in-depth analysis of the company’s financial position and outlook, the note referenced a comprehensive Pro Research Report and additional research tools available through InvestingPro. The analyst commentary and data cited in the note were presented as the basis for the price-target change and the maintained Market Perform rating.