SOLS

Solstice Advanced Materials is a brand-new public company, spun out of Honeywell on October 30, 2025, that makes low-GWP refrigerants, semiconductor materials, high-strength fibers and healthcare packaging across two segments (Refrigerants & Applied Solutions and Electronic & Specialty Materials). It is a real, scaled business — over 3,000 customers in ~120 countries, 20 manufacturing sites — with attractive end-market exposure to HVAC/R refrigerant transitions, semiconductors and defense. The 10-K explicitly warns that the historical financials may not reflect what results would have been as a standalone company, which makes the current numbers difficult to trust as a forward base.

The FY2025 figures are distorted by the separation. Revenue grew a modest 3.1% to $3.89B, but net income fell 60.1% to $237M and EPS to $1.49, while liabilities jumped 135.8% and equity dropped 56.7% — the signature of a spin-off recapitalization in which the parent loaded the entity with $1.97B of debt and extracted a $1.50B dividend. That leaves liabilities/equity at a heavy 3.04x and operating cash flow down 46.0% to $455M, barely above the rising $336M capex. ROE of 16.8% still looks respectable, but it sits on a thin, freshly leveraged equity base.