Solstice: A Fleeting Warmth

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Solstice Advanced Materials (SOLS +15.68%) – spun off from Honeywell (HON 0.06%) not long ago, a mere splinter from a larger tree – has seen a surge. A fifteen percent jump this morning, they say. It’s a momentary bloom, this enthusiasm. A flicker of warmth in a world grown accustomed to the cold calculations of capital.

The Quarter’s Yield

They report sales of $987 million for the last quarter, a modest eight percent rise. The alternative energy sector, including the whispers of nuclear power, and the refrigerants that keep the server farms humming – those boxes that devour our data and exhale heat – both showed double-digit growth. A full year’s tally comes to $3.9 billion. Numbers, numbers… they fall like rain on barren ground.

Earnings, however, are a twisted root. The accounting is…unclean. A consequence of the severing, they claim. They speak of $41 million in profit for the quarter, a sixty-nine percent decline from when they were sheltered within Honeywell’s bulk. For the year, $237 million, down sixty percent. A shrinking harvest. It’s easy to dress up a loss with “adjustments” and “non-GAAP” figures, but the common man sees only the dwindling share.

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A Promise and a Price

Looking ahead to 2026, they forecast $4 billion in sales and $2.60 in “adjusted” earnings per share. A tidy sum, if it materializes. But consider the valuation. $11.7 billion for a company still finding its footing, burdened by the weight of expectation. At $73.80 a share, the price-to-earnings ratio sits at 28.4. A hefty price for a mere two and a half percent growth. It’s a gamble, dressed up as a certainty.

The air smells of speculation. The scent is familiar, acrid. It clings to the throat. Until Solstice demonstrates a genuine capacity for sustained growth, a consistent yield for those who risk their capital, I see little reason for optimism. The wise man, the man who feels the chill of winter approaching, would be well-advised to cash out while the sun still shines. Let others chase the mirage. There are more reliable harvests to be found.

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2026-02-11 21:03