Element Solutions Boasts 'Broad Portfolio' To Capture Expanding Share: Analyst

Shares of Element Solutions Inc ESI were climbing in early trading on Monday.

Chipmakers are increasingly focused on reducing size and power consumption of chips, "much of which is enabled by ESI’s materials," according to Seaport Research Partners.

Analyst Michael Harrison initiated coverage of Element Solutions with a Buy rating and price target of $33.

The Element Solutions Thesis: The transition towards advanced packaging is still in the initial stages and the company has "a broad portfolio, strong customer relationships, and application expertise to capture expanding share within this growing opportunity set," Harrison said in the initiation note.

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"ESI’s businesses are capital-light and generate strong cash flow to fund organic and inorganic growth, and we expect Electronics to account for a growing portion of ESI’s earnings over time," he added.

During its second-quarter earnings release, the company had indicated that it could have "several years of record earnings ahead," which could be the case even if the electronics and industrial recovery is slower than anticipated, the analyst stated.

"ESI should be well-positioned to outgrow the market and drive strong bottom-line growth," he further wrote.

Price Action: Shares of Element Solutions had risen by 1.54% to $26.38 at the time of publication on Monday.

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