GrafTech International Shares Plunge 17% After Mixed Q4 Results and Uncertain Outlook for 2023
February 6, 2023
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GRAFTECH ($NYSE:EAF): GrafTech International is an American manufacturer of graphite products and carbon materials. The company has a long history of providing material solutions to customers in the steel, aerospace, and automotive industries. Its shares have recently been under pressure due to the release of its fourth quarter results and outlook for 2023. This has caused investor concern about the company’s near-term prospects. The company is facing difficult operating conditions due to the pandemic, which has reduced demand for the company’s products.
In addition, the company is expecting that higher raw material costs could lead to increased operating expenses in the near future. This drop was further exacerbated by the fact that GrafTech had previously released guidance that did not include this kind of decrease in revenue. As such, investors are concerned about the near-term prospects of the company and are cautious about investing in it right now. This has caused investor caution and has resulted in a 17% drop in the company’s shares on Friday. The company is now facing difficult operating conditions due to the pandemic, which could further reduce demand for its products. As such, investors will be closely monitoring GrafTech’s performance over the coming months to get a better understanding of the company’s near-term prospects.
Market Price
On Friday, GRAFTECH INTERNATIONAL shares opened at $5.9 and closed at $5.6, a plunge of 15.3% from the last closing price of 6.6. Analysts have weighed in on the company’s results and outlook, with most agreeing that the mismanagement of their product portfolio and lack of innovation have led to the current situation. Many are also concerned about their ability to compete with other companies in the same space. The company’s leadership has remained mostly silent on the matter, not offering any new information beyond what was released in the quarterly report. Investors, as well as analysts, are waiting for more news before making any decisions on the stock.
GRAFTECH INTERNATIONAL’s stock will likely remain volatile in the coming weeks, as investors and analysts try to figure out what the future holds for the company. It is clear that the company needs to make some major changes in order to stay competitive in the future, but no one is sure what those changes will be. Time will tell if GRAFTECH INTERNATIONAL can turn things around and get back on track. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Graftech International. More…
| Total Revenues | Net Income | Net Margin |
| 1.28k | 382.96 | 29.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Graftech International. More…
| Operations | Investing | Financing |
| 324.63 | -71.97 | -176.27 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Graftech International. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.6k | 1.27k | 1.32 |
Key Ratios Snapshot
Some of the financial key ratios for Graftech International are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -10.6% | -21.3% | 38.2% |
| FCF Margin | ROE | ROA |
| 19.7% | 100.4% | 19.0% |
Analysis
GoodWhale has conducted an analysis of GRAFTECH INTERNATIONAL‘s fundamentals and has concluded that the company is in a strong financial position. Its Star Chart score of 8/10 indicates that it is capable of paying off debt, funding future operations, and being profitable. GRAFTECH INTERNATIONAL is classified as an ‘elephant’, a type of company that has a lot of assets after all liabilities are deducted. Investors who are interested in such companies may be looking for a stable investment that can provide consistent returns over time. This type of company usually has reliable cashflows and is not prone to large fluctuations in the stock market. Furthermore, since it is rich in assets, it is likely to be very resilient to economic downturns and recessions. GRAFTECH INTERNATIONAL is also attractive to investors who are looking for companies with strong growth potential. Its medium rating in terms of asset, dividend, and growth shows that it has the potential to expand its operations and increase its profits in the future. Investors who are interested in these types of companies may be seeking an opportunity to invest in a high-growth business and benefit from the potential upside of the company. In conclusion, GRAFTECH INTERNATIONAL is an attractive investment opportunity to investors who are seeking a stable, reliable company with the potential for growth. Its high health score, strong cashflows, and substantial assets make it an attractive choice for investors looking for a long-term investment. More…
Peers
GrafTech International Ltd is one of the world’s largest manufacturers of graphite electrodes, which are used in electric arc furnaces to make steel. The company has a market share of about 17 percent. Its main competitors are Nanjing Baose Co Ltd, Zhenjiang Dongfang Electric Heating Technology Co Ltd, and Fuda Alloy Materials Co Ltd.
– Nanjing Baose Co Ltd ($SZSE:300402)
Nanjing Baose Co Ltd is a Chinese company with a market cap of 4.12B as of 2022. The company has a Return on Equity of 7.34%. Nanjing Baose Co Ltd is involved in the production and distribution of pharmaceuticals and medical supplies.
– Zhenjiang Dongfang Electric Heating Technology Co Ltd ($SZSE:300217)
Zhenjiang Dongfang Electric Heating Technology Co Ltd is a leading manufacturer of electric heating products in China. The company has a market cap of 10.34B as of 2022 and a return on equity of 7.75%. The company’s products are used in a wide range of applications including space heating, water heating, and industrial heating.
– Fuda Alloy Materials Co Ltd ($SHSE:603045)
Fuda Alloy Materials Co Ltd is a Chinese company that produces aluminum alloy products. Its market cap as of 2022 was $2.25 billion, and its return on equity was 6.16%. The company has a long history, dating back to the early 20th century, and is one of the leading producers of aluminum alloy products in China.
Summary
Investing in GrafTech International has been a volatile experience over the past quarter. After announcing mixed results and an uncertain outlook for 2023, the company’s shares quickly plunged 17%. The news sentiment surrounding the company has been mostly negative, causing the stock to continue to drop in price.
For investors looking to get involved with GrafTech, it is important to carefully consider the potential risks and rewards before making any decisions. It is also essential to stay up to date on the latest news and developments surrounding the company in order to make a sound investing decision.
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