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Why UL Solutions (ULS) Stock Is Trading Up Today

ULS Cover Image

What Happened?

Shares of safety certification company UL Solutions (NYSE: ULS) jumped 3.2% in the afternoon session after UBS raised its price target on the stock to $75 from $70. 

The firm, however, maintained its "Neutral" rating on the shares. This price target adjustment suggested a more optimistic view of the company's valuation from the analyst, which likely spurred investor interest. According to analysts polled by FactSet, UL Solutions held an average rating of "overweight" and a mean price target of $73.19. The action from UBS provided a specific, positive catalyst for the stock, despite the broader consensus from seven other analysts being a "Hold.".

After the initial pop the shares cooled down to $75.31, up 4.1% from previous close.

Is now the time to buy UL Solutions? Access our full analysis report here.

What Is The Market Telling Us

UL Solutions’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 2 months ago when the stock dropped 13.6% on the news that the company reported its second-quarter financial results, which showed a decline in net income and earnings per share despite revenue growth. 

The company’s revenue increased 6.3% to $776 million, but its net income dropped 8.5% to $97 million. This pushed the diluted earnings per share, a measure of profit per share, down by 10.0% to $0.45. UL Solutions attributed the fall in profit to a significant one-time gain from a business sale in the prior year and a higher income tax rate in the current quarter. Even though the company affirmed its full-year outlook and its adjusted earnings per share actually rose, investors appeared to focus on the decline in reported net income.

UL Solutions is up 51.7% since the beginning of the year, and at $75.31 per share, has set a new 52-week high. Investors who bought $1,000 worth of UL Solutions’s shares at the IPO in April 2024 would now be looking at an investment worth $2,155.

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