Does Avient’s (AVNT) Lofty P/E Reveal a Turning Point in Its Long-Term Growth Story?

• Avient Corporation recently reported a high price-to-earnings (P/E) ratio of 28.9x, reflecting strong investor confidence and expectations for accelerated future earnings growth, despite a period of moderate earnings performance.
• Analyst forecasts project annual earnings growth of 28% for Avient over the next three years, signaling that the company’s outlook is viewed as considerably more optimistic than the broader market’s expectations.
• We’ll explore how investor optimism about Avient’s future earnings growth could reshape the company’s broader investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

Avient Investment Narrative Recap

To hold Avient shares, an investor must buy into the story that demand for its high-performance specialty materials will accelerate meaningfully, supported by sector growth in healthcare and sustainability. The recent news of a high P/E ratio and doubled analyst earnings growth forecast strengthens this outlook, but does not meaningfully change the near-term catalyst of margin improvement or the major risk of continued cost pressures from persistent raw material inflation, especially if price increases cannot be fully passed on.

The most relevant recent announcement is Avient’s second-quarter 2025 earnings, which showed rising sales and a sharp rebound in net income after a volatile start to the year. These results provide important context for future catalysts focused on improved profitability, but they do not remove the ongoing threat posed by cost inflation and supply chain disruptions in raw materials.

Yet, in contrast, investors should also be aware of the potential cost pressure risk if inflation in pigments and flame retardants persists and cannot be offset by...

Read the full narrative on Avient (it's free!)

Avient's narrative projects $3.6 billion in revenue and $309.5 million in earnings by 2028. This requires 3.3% yearly revenue growth and a $190.6 million increase in earnings from $118.9 million today.

Uncover how Avient's forecasts yield a $42.00 fair value, a 12% upside to its current price.

Exploring Other Perspectives

Fair value estimates from the Simply Wall St Community range widely between US$25.95 and US$55.58, based on two member forecasts. Many see rapid earnings expansion as a key driver, but ongoing raw material cost risks could weigh significantly on Avient’s results, explore the range of views to see how different investors weigh these uncertainties.

Explore 2 other fair value estimates on Avient - why the stock might be worth 31% less than the current price!

Build Your Own Avient Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Avient research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Avient research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Avient's overall financial health at a glance.

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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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