Solventum Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Solventum trades at a deep discount to med-tech peers — 10.8x P/E versus a peer median of 25.5x and 7.8x EV/EBITDA versus 12.1x — and management is executing a credible deleveraging story, cutting total debt from $8.01B in FY2024 to $5.04B in FY2025 while guiding 2026 EPS to $7.10–$7.20.
However, the operational picture is deteriorating: FY2025 free cash flow turned negative at -$10M versus +$805M the prior year, gross margin compressed to 53.5% from 57.3% two years earlier, and Q1 2026 revenue declined 3.0% YoY with operating income of just $81M. The FY2025 operating margin of 26.2% was inflated by an anomalous Q4 2025 operating income of $1.68B that does not reflect the normalized quarterly run-rate of $81M–$214M, meaning underlying profitability is far weaker than the headline suggests. With the stock already up to $89.50 versus a 200-day MA of $77.78, much of the spinoff-driven revaluation may be priced in.
What could go wrong
- Negative free cash flow persists. FY2025 FCF was -$10M versus +$805M in FY2024, with capex of $379M consuming nearly all operating cash flow of $369M; if FCF does not recover, deleveraging stalls and the spinoff thesis weakens.
- Revenue stagnation. FY2025 revenue growth was only 0.86% YoY and Q1 2026 revenue declined 3.0% YoY; with ~$8.3B in annual revenue barely growing, margin expansion alone may not drive meaningful earnings upside.
- Gross margin erosion. Gross margin fell from 57.3% in FY2023 to 53.5% in FY2025, a ~380bp compression over two years that signals pricing pressure or input cost inflation in core MedSurg and Dental segments.
- Insider net selling. Over 24 months insiders net sold 8.48M shares worth $658M; the CEO sold 26,468 shares at $90.95 in September 2026, though this was partially offset by option exercises.
What would change my mind
Where this comes from: peer comparison, 25 Sep · FY24 and FY25 fundamentals · FY23 and FY25 fundamentals · Q1–Q2 FY26 results. Orin's read on SOLV; not advice.
How has the share price moved?
Up 15.3% over twelve months, from $71.98 on 27 Oct 2025 to $82.98 at the Tue 27 Oct 2026 close. Its highest close in that time was $92.44 on 3 Sep 2026; the last close is 10.2% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 12.8M, on 29 May 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All SOLV filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $753.1M | 0.0% |
| Vanguard Capital Management | $742.6M | 0.0% |
| Trian Fund Management | $635.5M | 15.0% |
| Vanguard Portfolio Management | $488.3M | 0.0% |
| State Street | $435.1M | 0.0% |
| Geode Capital Management | $378.3M | 0.0% |
| Invesco | $255.4M | 0.0% |
| FMR | $160.4M | 0.0% |
| Norges Bank | $132.2M | 0.0% |
| Morgan Stanley | $118.3M | 0.0% |
79 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 175 Form 4 filings; open-market trades net −$646.3M. Of the 50 on hand, none was an open-market trade — the rest are grants, option exercises and tax withholding.
Ask Orin about SOLV
Orin answers questions about SOLV from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 98.0× its last 12 months of profit (Thu 5 Nov close); the typical Healthcare company on the NYSE is at 25.8×. It has too few years of its own for a usual level.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 98.0× | — | 25.8× |
| P/S | 1.82× | — | — |
| EV/EBITDA | 24.0× | — | — |
| P/B | 3.1× | — | — |
- Listed on 1 Apr 2024 — earlier years are not shown.
- So it has no full fiscal year of its own on file yet — no usual level.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $91.13 (from $43 to $113) — 10% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$91.13
$43 – $113 · +10% against the last close
- 9 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 98.0× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 24.3×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| SOLVSolventum Corporation | $15B | 98.0× | 24.0× | 54.3% | 1.9% | 3% |
| BAXBaxter International Inc. | $13B | lost money | 27.2× | 30.1% | −9.3% | −17% |
| BDXBecton, Dickinson and Company | $58B | 51.5× | 15.2× | 47.0% | 5.7% | 4% |
| COOThe Cooper Companies, Inc. | $11B | 20.4× | 15.1× | 63.6% | 13.5% | 7% |
| HSICHenry Schein, Inc. | $9B | 24.3× | 12.5× | 30.3% | 3.0% | 12% |
- BAX: lost money over the last 12 months, so no P/E.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 98.0× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now98.0×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Healthcare companies on the NYSE were priced at a typical 25.8× their yearly profit (Tue 27 Oct close).
- Now25.8×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $133 a share — 60% above the $83.39 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $133 | 60% above $83.39 |
| Levered | $92 | 11% above $83.39 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.