Solstice Advanced Materials Inc "Keeping cool in a hot market" (Neutral) Spector

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Solstice Advanced Materials Inc "Keeping cool in a hot market" (Neutral) Spector

and the earnings stability in a

UBS Cons.

choppy market is a plus. Longer term we model EBITDA/EPS CAGR of ~11%/15%

Q1 0.63 0.53

through 2030. Near term we think 2Q is generally going to plan, and SOLS Q2E 0.76 0.76

continues to message its' approach to guidance remains more conservative. We Q3E 0.63 0.66

maintain our Neutral rating though as we still see some upside in nuclear already Q4E 0.69 0.57

priced in, and don't see consensus earnings moving up much for the next couple 12/26E 2.70 2.56

of years. 12/27E 3.30 3.16

12/28E 3.90 3.75

Refrigerants growth to continue and volumes to improve

Joshua Spector, CFA We're past the peak of refrigerant sales growth Y/Y, as SOLS laps the larger

Analyst

stationary OE transition to HFOs, but growth isn't expected to stop. As growth

joshua.spector@ubs.com

transitions from OEM to aftermarket, this should also be margin accretive, leading +1-212-713 6188

to RAS segment margin improvement in 2H26 into 2027+.

James Cannon

The company indicates the recent change in commercial refrigerant HFO Associate Analyst

transitions in the US have minimal impact. The US government delayed industry james-p.cannon@ubs.com

transition timing from 2027 to 2028-2032 depending on application/market. +1-212-713 4057

Solstice expected a delay, and therefore didn't bake a transition impact in 2027 or Amit Mehrotra

medium term plans. Since this was discussed for over a year, it wasn't a major Analyst

surprise. This was consistent with out initial take (link). Similar to our recent HVAC amit.mehrotra@ubs.com

expert call though (link), a delayed HFO transition could lead to higher prices in +1-201-352 1410

legacy refrigerants.