Ecovyst (ECVT), mcap=$1.2bn, price $8.62 vs $9.50

$ECVT pitch:
– Global provider of specialty chemicals with 75% sales in NA.
– #1 or #2 players in its end markets with minimal competition.
– At 6.5x EBITDA materially cheaper (50% discount) than peers, but with better growth, margins, and cash flow conversion.
– Recently announced revised capital allocation strategy with buyback plan for more than 1/3 of market cap over the next 4 years.
– PE overhang as CCMP is selling down its stake – reduced from 39% a year ago to 24% currently.
– Insiders purchased $1.2m shares at current prices.

$ECVT valuation:
– Trades at 6.5x fwd EBITDA, a substantial discount to specialty chemicals and industrial services peers with 10x-12x EBITDA valuations.
– With $300m ’23 EBITDA and 8.5x multiple, would be worth $14/share.

Exp. gain: +50-100% to $14-$18/share. With a $25-$30 longer-term target.

Full ECVT write-up (free guest account required):

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