UBS increased its price target on Solstice Advanced Materials Inc. to $87.00 from $75.00 on Thursday while retaining a Buy rating on the shares. That revised target implies potential upside from the stock's most recent price of $81.60, which has already eclipsed its previous 52-week high of $75.43.
Technical measures indicate the shares are trading in overbought territory after an 18% jump over the past week, with momentum indicators reflecting the rapid move higher.
The boost to the target follows Solstice's fourth-quarter results, which produced mixed signals. UBS said the quarter's results helped allay some concerns about near-term demand for refrigerants, even as U.S. residential HVAC product volumes declined.
On the fundamentals side, the company sits on an $11.9 billion market capitalization and reported diluted earnings of $1.49 per share for the trailing twelve months, valuing the stock at a price-to-earnings multiple of 42.8.
Management expects the refrigerant segment to deliver year-over-year growth in the first quarter driven by additional OEM sell-in. The company also projects that margins and product mix will improve through 2026 as it laps one-off comparisons and benefits from aftermarket expansion. Solstice's next quarterly report is anticipated around May 1, 2026.
UBS reviewed Solstice's 2026 guidance and found it broadly consistent with the firm's own expectations, but noted the company included roughly $40 million of higher costs relative to UBS's prior model. Despite the higher cost element, UBS characterized the guidance as conservatively framed and concluded that the core earnings outlook may be somewhat stronger than previously assumed.
There are contrasting components to Solstice's recent results. While the company posted an increase in revenue in the fourth quarter - rising 8% versus the year-ago period and supported by solid performance in key segments - its earnings did not meet analyst expectations. That divergence left investors and analysts focused on both top-line momentum and the underlying drivers of the earnings shortfall.
Overall, the UBS target revision reflects a view that the company's underlying refrigerant business and aftermarket opportunities provide a constructive forward-looking earnings profile, even as the near-term operating picture carries some uncertainty tied to cost timing and residential HVAC demand.
Key points
- UBS raised its price target for Solstice to $87 from $75 and kept a Buy rating.
- Shares traded at $81.60, above a prior 52-week high of $75.43; technical indicators show overbought conditions after an 18% weekly gain.
- Company expects year-over-year refrigerant growth in Q1 and margin/product-mix improvements through 2026; next earnings expected around May 1, 2026.
Risks and uncertainties
- Near-term demand risk - U.S. residential HVAC product declines could weigh on refrigerant volumes and are cited as a concern UBS seeks to address.
- Cost pressure - Solstice's 2026 guidance contains about $40 million of higher costs than UBS had modeled, introducing uncertainty into near-term profitability.
- Earnings execution - The fourth-quarter earnings miss despite revenue growth highlights the risk that profit metrics may lag top-line performance.