Q Stays in the Fast Lane, F26 Guide Raised; Raise TP to $175; Maintain Top Pick

研报英文原文证据摘录

Q Stays in the Fast Lane, F26 Guide Raised; Raise TP to $175; Maintain Top Pick

Qnity Electronics - Block Summary Model

Income Statement 2024A 2025E 2026E 2027E 2028E

Revenue $4,335 $4,754 $5,295 $5,611 $5,914

Consolidated EBITDA 1,262 1,402 1,594 1,729 1,845 Valuation

Depreciation 394 376 398 406 414 Our valuation is based on ~23x our 2027E adj. EBITDA. Our

target multiple reflects Qnity's quality of the business Consolidated EBIT 868 1,026 1,196 1,323 1,431

relative to our existing electronics materials coverage as

Net Interest 0 65 249 230 211 well as its solid organic growth which is ahead of its peers.

Tax 126 233 263 272 284

Upside Scenario $200.00

Adjusted Net Earnings 623 703 844 982 1,096 A stronger-than-anticipated semis upcycle (AI, HPC etc.),

EPS $2.98 $3.35 $4.02 $4.73 $5.34 robust recovery in consumer electronics and industry

node transitions in 2026/27 could accelerate Q's materials Cash Flow Statement 2024A 2025E 2026E 2027E 2028E

demand. This, in addition to stronger operating leverage,

CFO 1,061 1,273 767 1,222 1,443 could drive Q's 2027E EBITDA to ~$1.8 billion. A higher

Capex 200 285 460 337 355 multiple of 25x (closer to semis peers) would suggest a fair

value of $200.

Free Cash Flow (CFO - Capex) 861 988 307 885 1,088

FCF/Share 2.86 4.71 1.46 4.26 5.30 Downside Scenario $86.00

A global recession could lead to a contraction in Net Change in Cash 749 61 215 416

semiconductor demand, and execution challenges post-

Balance Sheet 2024A 2025E 2026E 2027E 2028E spin could further limit earnings growth. In this case, we

Cash & Equivalents 915 976 1,191 1,607 see EBITDA closer to $1.4 billion. Applying a lower, more

conservative multiple of 15x would suggest a valuation of

Short-term debt 24 23 23 23 $86.

Long-Term Debt 4,003 4,000 3,700 3,400 in USD