UL Solutions Seen as High-Quality Compounder, UBS Says

MT Newswires Live07-14 23:10

UL Solutions (ULS) is a high-quality compounder with sustainable organic growth, continued margin expansion and disciplined capital deployment, UBS Securities said in a Tuesday note.

The firm said it expects UL Solutions to generate 5% to 7% organic growth due to increasing electrification and the company's incumbency advantages in the US.

UBS forecasts the adjusted EBITDA margin expanding to 29% in 2028 from 27.4% in 2026 through pricing optimization, performance management and AI-driven productivity.

The firm also said UL Solutions has demonstrated disciplined capital deployment through acquisitions, divestitures and portfolio pruning. It also pointed to an increase in US imports of electrical and electronic products and job openings that it tracks as indicators supporting demand for the company's services.

UBS upgraded UL Solutions to buy from neutral and maintained its $110 price target.

Price: 88.94, Change: +1.41, Percent Change: +1.61

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