Sasol Limited (SSL): A Bull Case Theory 

We came across a bullish thesis on Sasol Limited on Valueinvestorsclub.com by AlfredJones!. In this article, we will summarize the bulls’ thesis on SSL. Sasol Limited’s share was trading at $6.50 as of November 28th. SSL’s trailing and forward P/E were 10.58 and 7.81 respectively according to Yahoo Finance.

Sasol Limited operates as a chemical and energy company.  It offers bitumen, industrial heating fuels, naphtha, lubricants and lubricant base oils, liquefied petroleum gas, automotive and industrial lubricants. SSL has emerged from a multi-year restructuring as a contrarian standout in the chemical sector, demonstrating resilience and disciplined execution.  Sasol Limited (SSL) has emerged from a multi-year restructuring as a contrarian standout in the chemical sector, demonstrating resilience and disciplined execution. After years of legacy debt and operational turbulence, the company’s 2025 results showcase a remarkable turnaround, with free cash flow surging 75% year-over-year to R12.6 billion, driven by margin discipline, asset divestitures, and one-off windfalls such as the $4.3 billion Transnet settlement and R2.9 billion environmental liability reduction.

Turnover declined slightly to R249 billion, but net debt is now down to $3.7 billion, significantly improving the balance sheet and alleviating long-standing investor concerns. Sasol’s approach to ESG, including R723 million in carbon credits and expanding renewable capacity, illustrates a pragmatic strategy rather than an all-consuming obligation, allowing the company to remain cash-generative while positioning for the energy transition.

Valuation metrics reinforce the contrarian appeal: SSL trades at EV/EBITDA of 3.1x and price/book of 0.4x, with implied upside of 55% to the median analyst price target of $9.73, and aggressive scenarios projecting up to $25.43 per ADR. Forecasted free cash flow remains robust, with projections reaching R15.4–19.4 billion by 2028, supporting potential re-rating and shareholder returns through debt reduction and dividends.

Despite short-term volatility from ESG and regulatory headlines, SSL’s disciplined capital allocation, margin expansion, and operational improvements make it a cash machine poised for recovery. In a market focused on “transition risk,” Sasol stands out as an undervalued, high-upside opportunity, combining tangible financial results with a clear path to a broad valuation reset, making it a compelling pick for contrarian and value-oriented investors seeking both cash flow visibility and long-term upside.

Previously we covered a bullish thesis on Sasol Limited (SSL) by Busy Investor Stock Reports in February 2025, which highlighted the company’s long-term growth, attractive valuation, and upside from commodity rebounds despite high debt. The stock has appreciated approximately 45.41% since then as the turnaround unfolded. The thesis still stands as SSL’s disciplined execution strengthens fundamentals. AlfredJones! shares a similar view but emphasizes the 2025 free cash flow surge and ESG strategy.

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Disclosure: None.