Is Solvay Attractively Priced After Recent Share Weakness And DCF Upside In 2025?

• Wondering if Solvay at around €26.88 is a value opportunity hiding in plain sight, or just a stock stuck in neutral? Let us walk through what the numbers are really saying about its current price tag.
• Over the last week Solvay has inched up about 2.0%, but it is still down roughly 13.2% year to date and 9.0% over the past year, despite being up close to 60% over three years and 66.6% over five.
• These moves come as Solvay continues its multi year portfolio reshaping and strategic focus on higher value specialty materials. This is a shift that the market is still learning how to price. At the same time, ongoing macro uncertainty in European industrial demand has kept many investors cautious, even as long term transformation themes take shape.
• On our framework Solvay scores a 3/6 valuation check, suggesting it looks undervalued on some metrics but not all. This makes it well suited for a deeper dive into multiples, cash flow models, and how to go one step further than traditional valuation tools by the end of this article.

Find out why Solvay's -9.0% return over the last year is lagging behind its peers.

Approach 1: Solvay Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, estimates what a business is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in € terms. For Solvay, the model used is a 2 Stage Free Cash Flow to Equity approach, which captures an initial higher growth phase before fading to more mature levels.

Solvay's latest twelve month free cash flow is slightly negative at about €298 Million, reflecting a period of heavy investment and portfolio reshaping. From there, analyst forecasts and Simply Wall St extrapolations point to a recovery, with free cash flow projected to reach roughly €309 Million by 2035. These annual cash flows are discounted back to today and combined with a terminal value to arrive at an estimated intrinsic value of around €41.33 per share.

Compared with the current price near €26.88, this framework suggests Solvay trades at roughly a 35.0% discount to its DCF-based fair value. This indicates the market may be pricing in more caution than the model reflects.

Result: Appears undervalued on this DCF basis

Our Discounted Cash Flow (DCF) analysis suggests Solvay is undervalued by 35.0%. Track this in your watchlist or portfolio, or discover 911 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Solvay.

Approach 2: Solvay Price vs Earnings

For profitable companies like Solvay, the price to earnings ratio is a straightforward way to gauge how much investors are willing to pay today for each euro of current earnings. It naturally captures how the market is weighing both the durability of profits and the outlook for future growth.

In broad terms, stronger expected growth and lower perceived risk justify a higher normal PE, while slower growth or higher uncertainty tend to compress the multiple. Solvay currently trades on a PE of about 18.23x, which sits below both the Chemicals industry average of roughly 20.79x and the broader peer group at around 21.98x.

Simply Wall St’s Fair Ratio for Solvay is 17.81x, a proprietary estimate of what its PE should be once you factor in its earnings growth profile, risk characteristics, profitability, industry positioning and size. This makes it more tailored than a simple comparison to peers or the sector, which can be skewed by outliers or different business mixes. With Solvay’s actual PE only slightly above this Fair Ratio, the stock appears close to fairly priced on an earnings multiple basis.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1463 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Solvay Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to pair your view of Solvay’s story with concrete numbers like future revenue, earnings, margins and an implied fair value. A Narrative on Simply Wall St, available in the Community page used by millions of investors, is your personalised storyline for the company. It links what you believe about Solvay’s rare earth expansion, digitalisation and sustainability strategy to a financial forecast and then to a fair value that you can compare against today’s share price to inform your decision to buy, hold or sell. Narratives update dynamically as new news, earnings or guidance appear, so your thesis is never static. For example, one Solvay Narrative might lean bullish, assuming earnings closer to the high end of analyst expectations and a fair value near €37, while a more cautious Narrative could anchor around the lower earnings and a fair value near €24, clearly showing how different perspectives on the same business lead to different investment decisions.

Do you think there's more to the story for Solvay? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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