KRO · Kronos Worldwide
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $9.52
Note written ·
Price against the kill line
12.9% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $9.52, on record since 11 November 2026. The shares are up 3.1% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $9.52, which would exceed the August 52-week high and show the shares leading the S&P 500. Fourth-quarter segment profit above the third quarter's $61.0 million would also show the shares leading.
Research onlyNot in the portfolio.
Key figures from the filings · Materials
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 541
- Revenue, change on a year (%)
- +18.4
- Gross margin (%)
- 23.5
- Operating margin (%)
- 10.7
- Net cash, cash less debt ($M)
- −508
- Enterprise value to sales (×)
- 0.7
- Enterprise value to operating income (×)
- 32.5
All filed numbers
What Kronos Worldwide reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 541 | +18.4 | 23.5 | 10.7 |
| first filed | 558 | +12.9 | 18.4 | 6.7 |
| first filed | 510 | +4.1 | 16.3 | 2.5 |
| first filed | 418 | −1.1 | −0.9 | −15.1 |
| first filed | 457 | −5.7 | 10.3 | −4.2 |
| first filed | 494 | −1.2 | 12.7 | 1.5 |
| Pre-tax income ($M) | 44.0 |
| Net income ($M) four quarters: −37.6 | 34.8 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.1 |
| Operating cash flow ($M) | 147 |
| Capital spending ($M) four quarters to 31 December 2025, filed 9 March 2026 | 42.9 |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 32.1 |
| Debt ($M) long-term debt | 540 |
| Net cash, cash less debt ($M) | −508 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) at 30 September 2025, filed 6 November 2025 | 334 |
| Inventory ($M) | 481 |
| Shareholders' equity ($M) | 784 |
| Market value ($M) | 954 |
| Enterprise value, market value plus net debt ($M) | 1,462 |
| Enterprise value to sales (×) | 0.7 |
| Enterprise value to operating income (×) | 32.5 |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.2 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 1.0% of shares outstanding sold short, 3.4 days of average trading to cover, +7.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $99K | $0 |
The thesis
Kronos Worldwide's titanium-dioxide profit recovery is documented, but the shares are more likely to lag the S&P 500 over the next three months than to beat it. Management warned on 5 November 2026 of seasonal demand softness and lower fourth-quarter production, and the fourth-quarter report settles whether third-quarter prices and volumes held.
The shares closed at $7.12 on 5 November 2026, the day of the results release, then rose to $8.50 by 11 November 2026. Company news and SEC filings list no announcement in those sessions beyond the results and the quarterly report. The 3-month price change is −1.2%.
Third-quarter net income was $34.8 million ($0.30 per share) against a $37.0 million loss a year earlier. Titanium-dioxide segment profit was $61.0 million versus a $15.3 million loss. Of the $0.30 per share, $0.11 is a non-cash deferred tax benefit, so run-rate earnings are lower than the headline.
Bullish and bearish views on Kronos Worldwide, Inc.
The bull case on Kronos Worldwide, Inc. (KRO), in brief: profit more than recovered. The bear case: management guides to a softer fourth quarter.
Bull case
- Profit more than recovered. Segment profit reached $61.0 million in the third quarter versus $41.0 million in the second quarter (reported 5 August 2026) and a $15.3 million loss a year earlier. Nine-month net income was $45.2 million, per the 5 November 2026 release.
- Prices and volumes both rose. Average selling prices were 5% above the third quarter of 2025, after being 3% below in the second quarter. Sales volume was 144 thousand metric tons versus 126 thousand a year earlier.
- Balance sheet eased slightly. The third-quarter 10-Q, filed 5 November 2026, shows long-term debt of $539.9 million and cash of $32.1 million at 30 September 2026, against $569.6 million and $26.6 million at 30 June 2026. Nine-month operating cash flow was $54.9 million provided, versus $89.6 million used in the same period of 2025.
- Earnings beat estimates. Benzinga reported third-quarter earnings of $0.30 per share against a $0.16 estimate, and sales of $541.1 million against $537.2 million.
- Dividend is unchanged. The board declared $0.05 per share on 28 October 2026, payable 10 December 2026. Nine-month dividends paid totaled $0.15 per share ($17.3 million), per the 10-Q.
Bear case
- Management guides to a softer fourth quarter. The 5 November 2026 release expects normal seasonal softness in demand and lower production because of maintenance timing. It gave no numerical guidance.
- Earnings quality is mixed. The $0.11 per share tax benefit is non-cash, and currency moves, mainly the euro, cut segment profit by about $5 million in the quarter.
- Debt is still heavy and costly. The 10-Q lists $486.2 million of 9.50% senior secured notes due 2029 and a $53.7 million subordinated loan from affiliate Contran, against $32.1 million of cash at 30 September 2026. Interest on that debt absorbs a large part of any profit if prices slip.
- No fresh analyst targets after the report. Coverage is two to four analysts. Targets published before the 5 November 2026 report are out of date, and no revised targets after it were found, so the sell-side read on the rebound is unknown.
Price setup
The shares closed at $8.50 on 11 November 2026, after closes of $7.12 on 5 November 2026, $7.46 on 6 November 2026, $8.09 on 9 November 2026 and $8.22 on 10 November 2026. The 52-week intraday high is $9.17 (25 August 2026), and the last close is 7.3% below it. The 52-week closing low is $4.33 (20 November 2025).
The shares closed above both moving averages on 11 November 2026: the 50-day average is $7.88 and the 200-day average is $6.91 (adjusted closes). The 3-month reference close of 13 August 2026 was $8.65, so the shares are back near the level that preceded the August high.
Kronos is controlled by the Valhi / NL Industries group, so the public float is small and a few sessions of buying can move the price. The rise from $7.12 to $8.50 came with no new company disclosure that explains it.
Catalysts ahead
- 19 November 2026: Record date for the $0.05 per share quarterly dividend, payable 10 December 2026. An unchanged rate since February 2026 shows management holding the payout while long-term debt stood at $539.9 million at 30 September 2026.
- ~25 February 2027 (est.): Fourth-quarter and full-year 2026 results; the company has not confirmed the date. Settles whether prices and volumes held through the seasonally weaker quarter that management flagged on 5 November 2026.
What would change the view
A daily close above $9.52, which would exceed the August 52-week high and show the shares leading the S&P 500. Fourth-quarter segment profit above the third quarter's $61.0 million would also show the shares leading.
What it trades with
Kronos trades with European coatings, plastics and construction demand and with the euro, since most production capacity is in Europe. Other titanium-dioxide producers such as Tronox and Chemours report the same pricing cycle. Its controlled-company structure within the Valhi / NL Industries group means its shares can move with related group news. Cyclical industrial names are the nearest comparison group.
The evidence, claim by claim (8)
- Third-quarter 2026 net sales were $541.1 million, up 18% from the third quarter of 2025; net income was $34.8 million ($0.30 per share) against a $37.0 million loss a year earlier. Kronos Worldwide third-quarter 2026 results release (Form 8-K) · as of
- Third-quarter 2026 titanium-dioxide segment profit was $61.0 million versus a $15.3 million loss in the third quarter of 2025; sales volume was 144 thousand metric tons versus 126 thousand; average selling prices were 5% higher. Kronos Worldwide third-quarter 2026 results release (Form 8-K) · as of
- Third-quarter net income includes a $12.1 million ($0.11 per share) non-cash deferred tax benefit; currency changes, mainly the euro, reduced segment profit by about $5 million. Kronos Worldwide third-quarter 2026 results release (Form 8-K) · as of
- Management expects normal seasonal softness in fourth-quarter demand and lower fourth-quarter production because of maintenance timing; no numerical guidance was given. Kronos Worldwide third-quarter 2026 results release (Form 8-K) · as of
- Long-term debt was $539.9 million (including $486.2 million of 9.50% senior secured notes due 2029 and a $53.7 million Contran loan); cash was $32.1 million. Kronos Worldwide third-quarter 2026 Form 10-Q · as of
- Nine-month 2026 operating cash flow was $54.9 million provided, versus $89.6 million used in the same period of 2025; nine-month dividends paid were $0.15 per share ($17.3 million). Kronos Worldwide third-quarter 2026 Form 10-Q · as of
- Third-quarter earnings per share of $0.30 compared with a $0.16 estimate; sales of $541.1 million compared with a $537.2 million estimate. Benzinga headline · as of
- The board declared a $0.05 quarterly dividend, payable 10 December 2026 to holders of record on 19 November 2026. Kronos Worldwide dividend release (Form 8-K) · as of
Sources
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