Truist Securities has raised its price target on Tronox (NYSE:TROX) to $8.00 from $7.00 and retained a Buy rating on the titanium dioxide producer. The updated target sits close to InvestingPro's Fair Value assessment noted for the company, indicating the stock may still be modestly undervalued despite a year-to-date gain in excess of 55%.
The broker's revision follows a January 26 earnings pre-announcement from Tronox that highlighted stronger-than-expected shipment volumes. Truist attributed the volume strength to market share gains across key geographies, a dynamic the firm views as supportive for near-term revenue trends.
At the same time, Truist cautioned that weakness driven by costs and an unfavorable product mix, which emerged in preliminary fourth-quarter results, is expected to pressure results into the first quarter of 2026. As a result, Truist adjusted its near-term estimates to account for those headwinds while continuing to point to management actions aimed at addressing high-cost capacity.
The research note emphasized Tronox's ongoing efforts to rationalize higher-cost production and improve its cost structure as constructive steps. Truist also flagged potential near-term catalysts for the company, including an improvement in titanium dioxide pricing dynamics and continued market share benefits tied to anti-dumping duties. A final decision from India on related trade measures remains a material item for investors to monitor.
Investors might also weigh Tronox's 3.08% dividend yield, a payout the company has sustained for 14 consecutive years despite recent profitability challenges. Tronox is scheduled to report earnings on February 18, and further details are available through InvestingPro's Research Report and accompanying ProTips, which the research product positions as additional analysis to help parse the company's financial picture.
In separate corporate developments, Tronox announced the permanent closure of its titanium dioxide plant in Fuzhou, China, citing weak domestic demand and rising costs as the reasons for the shutdown. The company expects restructuring charges in the range of $60-80 million tied to the closure, alongside projected annual cost savings in excess of $15 million.
Tronox has also secured conditional support for up to $600 million in financing from Export Finance Australia and the Export-Import Bank of the United States to advance its rare earth elements supply chain. The financing is intended to back mine extensions and necessary infrastructure development related to those projects.
Market watchers have noted shifting analyst views alongside these developments. BMO Capital upgraded Tronox from Underperform to Market Perform, citing a more favorable risk/reward profile. Mizuho increased its price target for Tronox from $3.00 to $3.50 but maintained an Underperform rating. Analysts referencing Tronox's rare earth minerals initiatives point to potential value stemming from investments such as the company's stake in Lion Rock Minerals.
Summary of what to watch:
- Execution on cost rationalization and the integration of lower-cost production as management actions to counter mix and cost pressures.
- Titanium dioxide pricing trends and any final trade rulings - particularly the pending decision from India - that could sustain market share gains.
- Progress on rare earth elements financing and project execution, including the conditional support of up to $600 million for mine and infrastructure work.