Morgan Stanley adjusted its price objective on Chemours Co. to $17, up from $15, while maintaining an Equalweight recommendation on the chemical maker. The stock was trading at $17.04 at the time of the update and has declined nearly 17% over the prior week, despite a year-to-date gain reported at 44.5%.
The bank lowered its EBITDA forecasts for the company but increased the price target to reflect stronger multiples among peers, with particular emphasis on the Thermal & Specialized Solutions segment. Morgan Stanley's revised valuation reflects relative peer strength rather than an improvement in Chemours' own short-term operating outlook.
On titanium dioxide, Morgan Stanley does not expect material market improvement across the board in 2026. The firm wrote that a recovery in volumes is contingent on an uptick in housing activity, which it views as more likely to occur in 2027 or later. For the TSS segment specifically, the analyst's outlook is in line with company guidance.
The analyst highlighted the need for Chemours to generate improved cash flow. Recent free cash flow conversion has been weak, and the company’s target of greater than 25% free cash flow conversion for 2026 will need to show an upward trajectory into 2027 and beyond to help address leverage concerns. At the end of 2025, Chemours carried significant debt, with leverage reported at 4.7 times, a figure the analyst flagged as material.
Separately, an institutional research analysis cited in the note characterized the stock as appearing overvalued at current levels. The brokerage also said it hopes for further progress toward resolution of PFAS-related matters in 2026, with particular attention to personal injury cases.
Recent company results paint a mixed picture. Chemours reported fourth-quarter 2025 earnings per share of $0.05, below the consensus estimate of $0.07, a shortfall of 28.57%. Revenue for the quarter came in at $1.3 billion, compared with an expected $1.33 billion, a shortfall of 2.26%. These deviations from expectations underscore the near-term challenges the company faced in meeting market forecasts during the quarter.
Investors and analysts will likely monitor upcoming disclosures closely, with particular focus on free cash flow conversion trends, progress on PFAS litigation and settlements, segment performance in TSS, and any signs of a titanium dioxide volume recovery tied to housing market dynamics.
Key takeaways
- Morgan Stanley raised its price target on Chemours to $17 while keeping an Equalweight rating, even as it trimmed EBITDA estimates.
- The brokerage does not expect a broad titanium dioxide recovery in 2026 and sees volume improvement tied to housing markets, likely in 2027 or later.
- C hemours missed fourth-quarter 2025 EPS and revenue expectations and faces weak free cash flow conversion alongside leverage of 4.7 times at year-end 2025.
What sectors are affected
- C hemicals and specialty materials - underlying company performance and valuation.
- Construction and housing - potential impact on titanium dioxide volumes when housing activity recovers.
- Credit and lending markets - elevated leverage and cash flow conversion affect credit risk assessments.