Highlights

  • Solventum shows 275.10% basic EPS growth, a P/E of 10.42 and a PEG of 0.00.
  • Second quarter net income was $92 million against $90 million; net sales were $2,209 million.
  • Solventum announced on August 5 that it will pursue a separation of Health Information Systems.
  • The company repurchased 3.9 million shares for about $288 million in the second quarter.

Solventum (NYSE:SOLV) shares were trading at USD 82.14 on October 28, 2026, down 1.02%, alongside one-year basic EPS growth of 275.10%, a trailing twelve-month P/E of 10.42 and a PEG ratio of 0.00 on an expected basis, the three figures behind its place among undervalued growth stocks. In its latest disclosures, the healthcare company approved a $1 billion share repurchase program in November 2025, announced on August 5 its intention to pursue a separation of its Health Information Systems business, and reported second quarter 2026 net income of $92 million.

Based in Eagan, Minnesota, and incorporated in Delaware, Solventum describes itself as a global healthcare company that develops, manufactures and commercializes a broad portfolio of solutions drawing on material science, data science and digital capabilities. It reports three segments: MedSurg, which includes Advanced Wound Care and Infection Prevention and Surgical Solutions; Dental Solutions; and Health Information Systems.

Growth: Second Quarter Earnings, Net Sales and Segments

Net income was $92 million in the second quarter against $90 million a year earlier. Basic earnings per share were $0.53 against $0.52, and diluted earnings per share were $0.53 against $0.51. For the six months, net income was $105 million against $227 million, and basic earnings per share were $0.60 against $1.31; the 2025 period included a benefit from income taxes of $86 million.

Total net sales were $2,209 million against $2,161 million, with reported growth of 2.2% and organic growth of 9.5%. The company said sales growth benefited by approximately $125 million from advanced customer ordering ahead of its July 2026 ERP deployment. MedSurg sales were $1,372 million against $1,218 million, Dental Solutions sales were $396 million against $338 million, and Health Information Systems sales were $354 million against $339 million.

Operating income was $181 million against $214 million. Selling, general and administrative expenses were $927 million against $772 million, which the company attributed to accrued legal expenses, partly offset by insurance recoveries.

Valuation: P/E of 10.42, PEG of 0.00 and Separation Commentary

The P/E ratio of 10.42 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on an expected basis. Cash provided by operating activities was $38 million for the six months against $198 million, which the company attributed primarily to higher annual incentive compensation payments.

On the second quarter call, Chief Executive Officer Bryan Hanson said Solventum believes Health Information Systems can create greater value outside the company, either independently or combined with a scaled player, and that the company is confident a separation can unlock shareholder value.

Capital Returns, Debt and Liquidity

The Board approved a share repurchase program of up to $1 billion in November 2025. Solventum repurchased 3.9 million shares for about $288 million in the second quarter and 4.8 million shares for about $355 million in the first six months, with no repurchases in 2025.

Cash and cash equivalents were $403 million at June 30, 2026 against $878 million at December 31, 2025. Total debt was $5,079 million against $5,035 million, including short-term borrowings and the current portion of long-term debt of $506 million. No commercial paper was outstanding under the program of up to $2.0 billion.

Disclosed Risks and Outlook

The company said it anticipates third quarter 2026 sales will be negatively affected as customers reduce inventory to normal levels after the advanced orders. It disclosed restructuring charges of $42 million in the second quarter under its Transform for the Future program, and accrued legal of $242 million against $43 million at year-end. It received $55 million of insurance proceeds in the quarter.

Solventum disclosed that 3M is a named defendant in approximately 8,400 lawsuits in the United States and one Canadian putative class action over the Bair Hugger patient warming system, and that Solventum has agreed to indemnify 3M for uninsured liabilities. It also recognized a receivable of approximately $120 million for accepted IEEPA tariff refund requests.

On the second quarter call, management raised its 2026 outlook: organic sales growth of 2.5% to 3%, from 2% to 3%; adjusted earnings per share, a non-GAAP measure, of $7.10 to $7.20, from $6.40 to $6.60; and free cash flow of $200 million to $300 million. Chief Financial Officer Wayde McMillan said third quarter sales growth is expected in a range of minus 3% to minus 4%.