Solstice Advanced Materials' (SOLS) pending acquisition of Element Solutions (ESI) does not force a trade-off between its electronics and nuclear businesses, with both positioned to drive growth, UBS Securities said in a note Monday.

The brokerage said Solstice's financial mix improves following the transaction, creating an earnings growth path it believes is not yet reflected in the stock, while shifting sales toward electronics, nuclear, and datacenter cooling tied to artificial-intelligence demand.

Leverage will rise near term but should decline quickly, UBS said, preserving room to keep investing in nuclear expansion projects.

The investment firm said execution and integration carry risk, but expects a standalone electronics segment to limit early challenges, with ESI's prior acquisition experience seen as complementary to Solstice's team.

UBS upgraded the sock to buy from neutral and trimmed the price target to $78 from $88.

Shares of Solstice Advanced Materials were down 1.5% in Monday afternoon trading.

Price: 60.38, Change: -0.92, Percent Change: -1.50