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1. Company Snapshot

1.a. Company Description

GrafTech International Ltd.research, develops, manufactures, and sells graphite and carbon-based solutions worldwide.It offers graphite electrodes to produce electric arc furnace steel and other ferrous and non-ferrous metals; and petroleum needle coke, a crystalline form of carbon used in the production of graphite electrodes.


The company sells its products primarily through direct sales force, independent sales representatives, and distributors.GrafTech International Ltd.was founded in 1886 and is headquartered in Brooklyn Heights, Ohio.

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1.b. Last Insights on EAF

GrafTech International Ltd.'s recent performance was driven by a solid Q1 earnings report, with the company beating loss estimates. The company's management team provided a positive outlook, citing strong demand for its products and a favorable market environment. Additionally, GrafTech's CEO, Tim Flanagan, highlighted the company's focus on innovation and its commitment to delivering value to shareholders.

1.c. Company Highlights

2. GrafTech's Q3 2025 Earnings: A Step in the Right Direction

GrafTech International reported a net loss of $28 million or $1.10 per share for the third quarter of 2025, with adjusted EBITDA coming in at $13 million, a significant improvement from the negative $6 million in the prior year. Revenue growth was driven by a 9% year-over-year increase in sales volume, reaching nearly 29,000 metric tons, with the U.S. market experiencing a 53% year-over-year growth. The average selling price for the third quarter was approximately $4,200 per metric ton, a 7% decline compared to the prior year. The actual EPS came out at '-1.03', beating estimates at '-1.22'.

Publication Date: Nov -24

📋 Highlights
  • Sales Volume Growth: Achieved a 9% year-over-year increase in sales volume, reaching nearly 29,000 metric tons, with U.S. sales up 53%.
  • Cost Reduction Progress: Cash cost per metric ton declined 10% YoY, with full-year guidance of a 30% cumulative reduction since 2023 to $3,860 per ton.
  • Financial Performance: Net loss of $28 million ($1.10/share) improved from prior year, with adjusted EBITDA rising to $13 million from -$6 million.
  • Cash Flow Recovery: Generated $25 million in operating cash flow and $18 million in adjusted free cash flow, reversing four quarters of negative cash flow.

Operational Highlights

The company's efforts to reduce costs are yielding results, with a 10% year-over-year reduction in cash cost per metric ton for the third quarter. The team continues to identify and execute cost reduction opportunities across various components of variable and fixed costs, including reducing raw material consumption, lowering energy usage, and optimizing production schedules. The full-year guidance for cost reductions has been increased, with a target of achieving a 10% decline in cash COGS per metric ton, translating to approximately $3,860 for the full year.

Cash Flow and Liquidity

GrafTech reported positive cash flow for the first time in four quarters, with cash provided by operating activities of $25 million and adjusted free cash flow of $18 million. The company's total liquidity stands at $384 million, consisting of $178 million of cash, $107 million of availability under its revolving credit facility, and $100 million of availability under its delayed draw term loan. This strong liquidity position will support the company's ability to manage through near-term industry-wide challenges.

Outlook and Valuation

Analysts estimate next year's revenue growth at 15.9%. The current valuation metrics indicate a P/S Ratio of 6.01 and an EV/EBITDA of 568.34, suggesting that the market is pricing in significant growth potential. However, the ROE of 149.31% and ROIC of -7.69% indicate a mixed picture, with the company still facing challenges in terms of profitability. As the company continues to execute its disciplined plan, it is well-positioned to capitalize on demand growth in the U.S. and EU, driven by the increasing adoption of electric arc furnace steel production.

Market Trends and Opportunities

The EAF method of steelmaking continues to gain market share globally, accounting for 51% of steel production outside of China. GrafTech is well-positioned to capitalize on this trend, with its strong commercial momentum in the U.S. and EU. The company is also optimistic about the opportunities ahead, including the potential unlocking of the battery-related market with the finalization of the trade case next year. As the company continues to navigate the complex market landscape, its focus on cost reduction, operational excellence, and customer value proposition will be key drivers of its long-term success.

3. NewsRoom

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GrafTech International Ltd. (NYSE:EAF) Given Consensus Recommendation of “Reduce” by Brokerages

Dec -01

Source: defenseworld.net

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4 Metal Fabrication Stocks to Buy as Industry Trends Improve

Oct -29

Source: zacks.com

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GrafTech International: Tiny Improvements Come Slow

Oct -27

Source: seekingalpha.com

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GrafTech International Ltd. (EAF) Q3 2025 Earnings Call Transcript

Oct -24

Source: seekingalpha.com

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GrafTech International (EAF) Reports Q3 Loss, Tops Revenue Estimates

Oct -24

Source: zacks.com

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GrafTech Reports Third Quarter 2025 Results

Oct -24

Source: businesswire.com

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GrafTech (EAF) Is Attractively Priced Despite Fast-paced Momentum

Oct -17

Source: zacks.com

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GrafTech Announces Third Quarter 2025 Earnings Conference Call and Webcast

Oct -02

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.86%)

6. Segments

Graphite Electrodes - Non-LTAs

Expected Growth: 9.5%

GrafTech's Graphite Electrodes - Non-LTAs growth is driven by increasing demand from electric arc furnace (EAF) steel producers, driven by the shift towards EAF steel production. Additionally, growing adoption of graphite electrodes in lithium-ion battery production and increasing sales to non-steel markets, such as silicon metal and ferroalloy producers, contribute to the 9.5% growth.

Graphite Electrodes - LTAs

Expected Growth: 10.5%

GrafTech International Ltd.'s Graphite Electrodes - LTAs growth of 10.5% is driven by increasing demand from electric arc furnace (EAF) steel producers, growth in the global steel industry, and rising adoption of graphite electrodes in the production of steel. Additionally, GrafTech's strong market position, operational efficiency, and cost savings initiatives contribute to its growth.

By-products and Other

Expected Growth: 8.5%

GrafTech's By-products and Other segment growth of 8.5% is driven by increasing demand for recycled petroleum coke, a by-product of the graphite electrode manufacturing process, used in the production of steel and aluminum. Additionally, the company's strategic initiatives to optimize its manufacturing process and improve operational efficiency have contributed to the growth.

7. Detailed Products

Graphite Electrodes

GrafTech's graphite electrodes are used in electric arc furnaces (EAFs) for steel production, refining, and smelting of ferrous and non-ferrous metals.

Graphite Refractories

GrafTech's graphite refractories are used in high-temperature applications such as steel ladles, tundishes, and other heat-containing vessels.

Advanced Graphite Materials

GrafTech's advanced graphite materials are used in various industrial applications, including aerospace, automotive, and energy storage.

Industrial Graphite

GrafTech's industrial graphite is used in various industrial applications, including lubricants, foundry, and friction products.

Consumer Graphite

GrafTech's consumer graphite is used in various consumer products, including pencils, batteries, and brake pads.

8. GrafTech International Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

GrafTech International Ltd. operates in the graphite electrode industry, which has few substitutes. However, the increasing adoption of electric arc furnaces and the development of alternative technologies could pose a moderate threat to the company's business.

Bargaining Power Of Customers

GrafTech International Ltd. has a diverse customer base, and no single customer accounts for a significant portion of its revenue. This reduces the bargaining power of customers.

Bargaining Power Of Suppliers

GrafTech International Ltd. relies on a limited number of suppliers for its raw materials, which could lead to moderate bargaining power. However, the company's long-term contracts and diversified supplier base mitigate this risk.

Threat Of New Entrants

The graphite electrode industry has high barriers to entry, including significant capital expenditures and technical expertise. This makes it difficult for new entrants to join the market.

Intensity Of Rivalry

The graphite electrode industry is highly competitive, with a few large players competing for market share. GrafTech International Ltd. faces intense rivalry from its competitors, which could lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 92.23%
Debt Cost 8.26%
Equity Weight 7.77%
Equity Cost 9.26%
WACC 8.34%
Leverage 1186.26%

11. Quality Control: GrafTech International Ltd. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Amprius Technologies

A-Score: 3.8/10

Value: 6.0

Growth: 3.2

Quality: 3.3

Yield: 0.0

Momentum: 10.0

Volatility: 0.3

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Enovix

A-Score: 2.9/10

Value: 6.0

Growth: 4.0

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 1.0

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ESS Tech

A-Score: 2.8/10

Value: 6.0

Growth: 7.2

Quality: 3.3

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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GrafTech

A-Score: 2.7/10

Value: 6.2

Growth: 1.1

Quality: 4.2

Yield: 0.0

Momentum: 3.5

Volatility: 1.0

1-Year Total Return ->

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Ideal Power

A-Score: 2.7/10

Value: 6.4

Growth: 4.1

Quality: 3.4

Yield: 0.0

Momentum: 1.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Expion360

A-Score: 2.5/10

Value: 8.6

Growth: 3.3

Quality: 3.3

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

16.72$

Current Price

16.72$

Potential

-0.00%

Expected Cash-Flows