Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.6 |
| P/S | 9.1 |
| EV/EBITDA | 4.6 |
| Fwd P/E | 7.3 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.2x
- ▸PEG: 0.10
ASH · Why this verdict
Why Ashland (ASH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ashland has excellent cash conversion (518% FCF/net income) and a bullish breakout chart, but the price is 6.3% above the $70 analyst target, earnings are mixed and a report lands in 2 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The chart shows a breakout, with a golden cross, price above all moving averages, RSI 69, bullish MACD and rising on-balance volume lifting momentum to 7.4/10. Chart pattern detection | Price should hold above the $69.82 stop and momentum should stay above 5.5/10. | →Stable |
| CounterThe price is only 4.6% from its 52-week high and an RSI of 69 is near overbought, so a breakout can fade right after the earnings report. | ||
The price of $74.68 is already 6.3% above the $70 analyst target, leaving negative reward-to-risk of -0.72 against 8.7% downside to the stop. Estimated upside | Analyst targets should be raised above the current price before upside returns. | →Stable |
| CounterMomentum is strong and analyst targets lag price after a breakout, so target raises after the earnings report could quickly restore upside. | ||
Ashland shows excellent cash conversion, with free cash flow at 518% of net income and a 9/9 Piotroski F-Score. Quality breakdown | Free cash flow should stay above 100% of net income over the next 12 months as GAAP earnings recover. | →Stable |
| CounterA 518% FCF/NI ratio comes off a very low net income base (net margin score 1.4) and may reflect working-capital releases or non-cash charges that will not repeat. | ||
Earnings are inconsistent, with 2 beats and 2 misses in the last 4 quarters (average surprise -2.2%, a 14.6% miss in November 2025), and the next report lands in 2 days. Earnings | EPS should meet or beat estimates on 2026-11-03 to confirm the recovery. | →Stable |
| CounterThe two most recent quarters were a 3.6% beat and a 3.0% miss, small deviations, and the larger misses are over a year old. | ||
The business has no competitive moat, a quality score of only 5.2/10 and revenue growth of just 4.3/10 on the growth score, with a 17.3x forward P/E. Valuation breakdown | Quarterly revenue should hold above the $502M next-quarter estimate level to justify the 17.3x forward multiple. | →Stable |
| CounterEarnings growth scores 10/10 and PEG is 0.10, so profits are growing much faster than revenue and the multiple may prove cheap. | ||
The chart shows a breakout, with a golden cross, price above all moving averages, RSI 69, bullish MACD and rising on-balance volume lifting momentum to 7.4/10.
→StableChart pattern detection
- Expectation
- Price should hold above the $69.82 stop and momentum should stay above 5.5/10.
CounterThe price is only 4.6% from its 52-week high and an RSI of 69 is near overbought, so a breakout can fade right after the earnings report.
The price of $74.68 is already 6.3% above the $70 analyst target, leaving negative reward-to-risk of -0.72 against 8.7% downside to the stop.
→StableEstimated upside
- Expectation
- Analyst targets should be raised above the current price before upside returns.
CounterMomentum is strong and analyst targets lag price after a breakout, so target raises after the earnings report could quickly restore upside.
Ashland shows excellent cash conversion, with free cash flow at 518% of net income and a 9/9 Piotroski F-Score.
→StableQuality breakdown
- Expectation
- Free cash flow should stay above 100% of net income over the next 12 months as GAAP earnings recover.
CounterA 518% FCF/NI ratio comes off a very low net income base (net margin score 1.4) and may reflect working-capital releases or non-cash charges that will not repeat.
Earnings are inconsistent, with 2 beats and 2 misses in the last 4 quarters (average surprise -2.2%, a 14.6% miss in November 2025), and the next report lands in 2 days.
→StableEarnings
- Expectation
- EPS should meet or beat estimates on 2026-11-03 to confirm the recovery.
CounterThe two most recent quarters were a 3.6% beat and a 3.0% miss, small deviations, and the larger misses are over a year old.
The business has no competitive moat, a quality score of only 5.2/10 and revenue growth of just 4.3/10 on the growth score, with a 17.3x forward P/E.
→StableValuation breakdown
- Expectation
- Quarterly revenue should hold above the $502M next-quarter estimate level to justify the 17.3x forward multiple.
CounterEarnings growth scores 10/10 and PEG is 0.10, so profits are growing much faster than revenue and the multiple may prove cheap.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.3 |
| ROA | 1.6 |
| Gross margin | 2.7 |
| Op margin | 4.6 |
| Net margin | 1.4 |
| Current ratio | 10.0 |
| FCF quality | 10.0 |
| Moat | 5.0 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 518% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 9/9
Growth
7.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 10.0 |
Momentum
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.9 |
| MA position | 9.0 |
| Volume | 2.6 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 6.4 |
| erm sentiment | 5.0 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 3.3 |
| growth rank | 4.0 |
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.0 |
| support resistance | 4.7 |
| 52w position | 8.8 |
| gap | 5.0 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.8 |
| days to cover | 2.2 |
| volatility | 7.0 |
| put call | 0.0 |
| implied vol | 3.0 |
| beta | 10.0 |
| debt equity | 6.3 |
- ▸Elevated put/call: 4.20
- ▸High IV: 62%
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 1.4 |
| dividend safety | 5.8 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings today
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:5.7>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.9=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.90
Upside
-4.5%
Downside
5.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 62, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.4B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.9=NEGATIVE, EARNINGS_PROXIMITY:0d<=7d) reinforce the read. Current asymmetry R:R is -0.90 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Growth at 7.2, and Value at 6.4; the weakest are Peer rank at 3.5, Catalyst at 4.1, and Risk (lower is worse) at 4.6. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.90 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion
Trip ifFree cash flow to net income falls below 100% from current 518%.
- P2Breakout Uptrend Momentum
Trip ifShare price falls below $69.82 from current $74.68.
- P3Price Above Analyst Target
Trip ifAnalyst target rises above $82 from current $70.
- P4Mixed Earnings With Binary Event
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5No Moat Modest Growth
Trip ifForward P/E rises above 22x from current 17.3x.