Element Solutions falls 8.9% after record third-quarter results

What happened

Element Solutions (ESI) fell 8.9% on October 22, 2026, because quarterly results that set company records also showed margin pressure and heavy trading. The stock closed at $33.11 after trading 3.2 times its 20-day average and opened 2.3% below the previous close. Business Wire and Zacks Investment Research reported the results, and management said demand tied to AI infrastructure, advanced semiconductor packaging and high-performance circuit boards supported the quarter.

How big was the move

The decline of 8.9% was 3.3 times a typical daily move for this stock and was 8.1 percentage points worse than the Basic Materials sector median, which fell 0.7% on the day. Trading volume was 3.2 times its 20-day average while the S&P 500 fell 1.2% on the day. The stock’s market sensitivity was indicated by a beta of 1.36, meaning the stock tends to move more than the market.

The technical picture

The stock traded 8.5% below its 20-day moving average and 7.0% below its 50-day moving average, with the 50-day average below the 200-day average, a sign of a weak longer-term trend. It was 9.8% below its 200-day moving average and 32.8% below the 52-week high. The Relative Strength Index (14 days) stood at 37, in a neutral range between 30 and 70. Volatility was 42% annualized over 60 days, higher than 80% of its own readings over five years.

Fundamentals and valuation

For the four quarters through September 30, 2026, Element Solutions reported revenue of $3.49 billion, which grew 39.6% from a year earlier. Diluted earnings per share for that period were $0.85, with earnings per share growth from a year earlier down 14.6%. Gross margin was 36.6% versus 42.0% a year earlier, and operating margin was 11.7% versus 13.9% a year earlier. Free-cash-flow margin was 5.1% and return on invested capital was 7.4%.

The balance sheet showed net debt of 4.0 times EBITDA, and the share count increased by 0.7% over one year. Valuation measures showed a price to trailing earnings of 39.2 times trailing earnings, higher than 71% of its own readings over the past five years, where the five-year median was 29.6 times earnings. Price to forward earnings was 18.2 times expected earnings and free-cash-flow yield was 2.1%.

PromtFinance scores ranked the company 27 on Value (Very weak), 75 on Growth (Positive), 46 on Quality (Neutral), 52 on Momentum (Neutral), 77 on Revisions (Positive) and 42 on Stability (Weak). Those scores underline the contrast between strong growth signals and a stretched valuation.

Earnings and analyst expectations

Element Solutions reported quarterly earnings of $0.50 per share against $0.48 expected, 4.3% above estimates, and management said the quarter produced record revenue, adjusted EBITDA and adjusted EPS. The company raised its outlook for full-year adjusted EBITDA to roughly $720 million. The last report marked seven consecutive quarters beating estimates and an average surprise over the last four reports of 5.9% above estimates. Typical two-day reactions after recent reports have been modest, with the stock falling 0.2% on average.

Analysts’ consensus price target was $47.90, 44.7% above the closing price. Thirty-five analysts had ratings on the stock and the consensus rating was Buy, with 46% of analysts giving a rating of Buy or Strong Buy. A transcript of the Q3 2026 earnings call, which included commentary from CEO Benjamin Gliklich and CFO Carey Dorman, was released and reported by Seeking Alpha.

What to watch

• October 27, 2026: Next report date listed as the company’s next earnings event.
• Full-year adjusted EBITDA outlook: management raised the outlook to approximately $720 million.
• Balance-sheet leverage: net debt of 4.0 times EBITDA could influence financing and cash allocation decisions.
• Valuation gap: consensus price target of $47.90 is 44.7% above the closing price.
• Margin trends: gross margin 36.6% versus 42.0% a year earlier and operating margin 11.7% versus 13.9% a year earlier.