Tronox Holdings plc (TROX) stock intrinsic value fair value estimate & owner earnings analysis

WHAT THE BUSINESS IS Tronox mines titanium-bearing mineral sands (South Africa and Australia), smelts and refines them, and makes titanium dioxide (TiO2) pigment, the white pigment in paint, coatings and plastics, for roughly 1,200 customers. In 2025 it sold $2.9 billion: TiO2 $2.3 billion, zircon $274 million and other products such as pig iron $326 million. Owning the mines and plants is meant to make it a low-cost producer, but pigment is a commodity and the price is set by industry supply and demand, which has been weak. WHAT THE NUMBERS SHOW We measure what is left for shareholders after operating cash flow, stripping out one-off working-capital swings, deducting stock compensation, and deducting the capital spending needed just to keep the plants and mines running. Per share that came to about $1.14 in 2019 (the year Cristal was added), $1.55 in 2020, $2.83 in 2021 (a pandemic price spike), $0.76 in 2022, $0.26 in 2023, minus $0.04 in 2024 and minus $1.87 in 2025. Three years of steady erosion is the central fact. In 2025 sales fell 6% to $2.9 billion, pigment selling prices fell (fourth-quarter TiO2 prices were down about 8% on the prior-year quarter, partly offset by volumes up 13%), and the company spent $341 million on capital projects against $302 million of depreciation. Of the 2025 shortfall, about $123 million was cash restructuring cost for closing plants, roughly $0.78 per share, of which $76 million was paid in the year and about $28 million was still owed at year-end. We left those payments in as a real cost. The company has closed capacity: its 90,000-tonne Botlek plant in the Netherlands was idled from 2025 and its 46,000-tonne Fuzhou plant in China was permanently closed in January 2026, citing weak Chinese demand and excess Chinese output. Further closure costs will fall in 2026. Anti-dumping duties on Chinese pigment came into force in the European Union in January 2025 (until January 2030) and in Brazil in October 2025 (five years), which is a structural help, but the filing itself says there is no assurance the duties will lift prices, and India's duties are currently stayed by a court. DEBT MATTERS HERE Total debt is $3.2 billion, about 9 times trailing adjusted EBITDA. Interest paid was $157 million in 2025. Liquidity was $674 million at year-end and the company was in compliance with its covenants. Little matures before 2029, when about $1.8 billion falls due. The dividend was cut from $0.50 to $0.35 per share in 2025. Because owner earnings are already after interest, we do not subtract debt again, but the leverage is what makes the weak case so poor. HOW WE ANCHORED THE VALUE We used the years since the Cristal acquisition (2019 to 2025), excluding the 2021 price spike as a pandemic-driven peak that does not describe normal conditions. The middle of the remaining years is about $0.50 per share, roughly $79 million a year. Recent years sit below that, so we did not simply assume it returns. The business needs continued capital spending to stay in operation, and that is deducted every year. BASE CASE: about $5.00 per share Owner earnings recover in steps: about minus $0.50 in 2026 (the 2025 level excluding the roughly $0.78 of restructuring cash cost is about minus $1.09, and closed plants no longer carry idle costs, higher fourth-quarter volumes and EU/Brazil duties are already in place), zero in 2027, then $0.50 a year from 2028 through 2050. The 2026 figure is above the 2025 actual of minus $1.87 for the named restructuring reason above; we give no credit for a price recovery, plant-closure savings or share gains, since none can be shown in the filings. The 25-year horizon reflects mine lives that the filing puts between under one year and 45 years; nothing is credited after 2050. No growth is assumed: the company has no proven, repeatable growth engine that meets our test, and the earlier acquisitions (Cristal) are already in the base. BEAR CASE: about minus $2.43 per share Chinese overcapacity keeps prices at 2025 levels. Owner earnings stay negative: about minus $1.00 in 2026, minus $0.75 in 2027 and minus $0.50 in 2028 and 2029 as closure costs and interest absorb cash, then nothing is credited because nothing we can name and evidence supports profits after the 2029 refinancing. On this path the company would use roughly $380 million of cash over four years and would owe more than the equity is worth; the shortfall would have to be met by new borrowing or new shares. BULL CASE: about $14.35 per share The Botlek and Fuzhou closures raise plant utilisation, the European and Brazilian duties hold, and owner earnings reach about $0.75 in 2027 and $1.25 a year from 2028 through 2050, a little below the 2019 to 2020 levels of $1.14 and $1.55. We did not credit the 2021 level, which came from a price spike. WHAT COULD MAKE THIS WRONG Upside: pigment prices could recover faster than we allow. Downside: Chinese exporters are looking for ways around the duties, including buying plants outside China (per the filing), and about a quarter of production is exposed to conditions in South Africa and Saudi Arabia (operations there have had power, currency and security risks). Not reconciled: the company's own definition of working capital includes restructuring payments and other long-term items; we treated only receivables, inventory, prepaid items, payables and current taxes as working capital. Our most recent filing on record is the 2025 annual report (filed February 2026); we could not review the second-quarter 2026 report.