Bear of the Day: Ashland (ASH)

Ashland Inc.ASH is navigating the uncertain macroeconomic environment. This Zacks Rank #5 (Strong Sell) is expected to see earnings decline 18.9% in fiscal 2025.

Ashland is a global additives and specialty ingredients company with a market cap of $2.4 billion. It serves customers in more than 100 countries in a wide range of markets including architectural coatings, construction, energy, food and beverage, personal care and pharmaceutical.

Ashland Missed on Earnings in the Fiscal Third Quarter of 2025

On July 29, 2025, Ashland reported its fiscal third quarter 2025 results and missed on the Zacks Consensus Estimate by $0.11. Earnings were $1.04 versus the consensus of $1.15.

It was the second earnings miss in a row.

Sales fell 15% to $463 million year-over-year. Sales were impacted by previously announced portfolio optimization which reduced overall sales by approximately $53 million, or 10%, versus the prior year quarter. Excluding those initiatives, sales declined 5%.

There were stable demand trends across most markets, though volumes fell short of expectations as anticipated growth did not materialize.

All four of its main segments saw falling sales. Life Sciences sales fell 17% to $162 million. Personal Care sank 16% to $147 million. Specialty Additives retreated 13% to $131 million while Intermediates sales declined 8% to $33 million.

Ashland Updated Its Fiscal 2025 Outlook

In July 2025, Ashland updated its full-year fiscal 2025 outlook to reflect the current environment, which was a stable but subdued macroeconomic environment and continued caution across customer channels.

Demand trends in each of the company’s segments remain mixed. Pharmaceuticals continue to recover and show resilience. Personal Care was stable while Specialty Additives and Intermediates remained under pressure.

In better news, the company is benefitting from FX tailwinds and from a $30 million restructuring program which is expected to generate about $7.5 million in savings in the fourth quarter.

Analysts Cut Fiscal 2025 and 2026 Earnings Estimates

Analysts are bearish. 4 estimates were cut for fiscal 2025 in the last 60 days. That has pushed the Zacks Consensus Estimate down to $3.61 from $3.77 during that time.

That is an earnings decline of 18.9% as Ashland made $4.45 last year.

Analysts are gloomy on fiscal 2026 as well. 4 estimates were cut in the last 2 months. The Zacks Consensus Estimate for fiscal 2026 has fallen to $4.39 from $4.71 in the last 60 days.

However, that’s earnings growth of 21.4% as it’s considerably higher than this year’s expected earnings.

Here’s what it looks like on the 5-year Price and Consensus chart.

Ashland Shares Sink in 2025

Shares of Ashland are weak this year, having fallen 21.2% year-to-date. That is well under the S&P 500, which is up 12.5% during the same time.

Is Ashland a deal?

It trades with a forward P/E of 14.7. A P/E of 15 or less usually means a company has value.

But it has a PEG ratio, which measures P/E over growth, of 3.8. A cheap PEG ratio is 1.0 or under so Ashland is not cheap by this metric.

Ashland pays a dividend for your patience, currently yielding 3.1%.

Investors looking at the chemical companies, like Ashland, might want to stay on the sidelines until the earnings estimates turn around.

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This article originally published on Zacks Investment Research (zacks.com).

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