Why Solstice Advanced Materials Stock Just Popped
Key Points
Solstice reported decent sales growth in Q4 alongside a spin-off related drop in earnings.
Up until last October, Solstice was a division of Honeywell.
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Solstice Advanced Materials (NASDAQ: SOLS) stock, the Honeywell (NASDAQ: HON) advanced materials and specialty chemicals division that spun off in October 2025, soared 15.2% through 12:35 a.m. ET Wednesday after reporting Q4 earnings this morning.
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Solstice Advanced Materials Q4 earnings
Solstice grew its sales 8% year over year to $987 million in Q4, with sales from its alternative energy (including nuclear energy) and refrigerants (used for cooling AI data centers, for example) divisions both growing by double digits. Sales for the full fiscal year, which stretches back to before where Solstice spun off, are reported as $3.9 billion.
Earnings are still a little funky due to accounting quirks related to the spinoff, but for what it's worth, Solstice says it earned $41 million in Q4, 69% less than it earned as part of Honeywell last year. Full-year earnings were $237 million, down 60% from 2024 -- when Solstice was entirely part of Honeywell.
Is Solstice stock a buy?
Looking ahead to 2026, when the spinoff quirks will be behind it, and the company's financials will get a bit easier to analyze, Solstice forecasts annual sales of about $4 billion and "adjusted" (i.e., non-GAAP) earnings of about $2.60 per share.
Solstice stock is valued at about $11.7 billion today, with minimal debt. At $73.80 per share, the stock trades at about 28.4 times current-year projected earnings. That seems a mite pricey to me, given that, if Solstice sales hit $4 billion this year, it would mean they grow only 2.5% year over year.
Until Solstice proves it can do better than that, I'm going to have to call this stock a sell -- and considering how well the stock is doing today, now might be a great time to cash out.
Should you buy stock in Solstice Advanced Materials right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Honeywell International. The Motley Fool has a disclosure policy.
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