Morgan Stanley has revised its price target for Olin (OLN, Financial), reducing it from $28 to $20 while maintaining an Underweight rating on the stock. The decision comes amid signs of a market imbalance, chiefly caused by a decrease in polyethylene exports. Despite stable domestic demand in April, the company faces increased market length due to dwindling orders from key international regions, including China, Europe, and Latin America. This drop in export demand has prompted expectations for reduced prices moving forward. The analyst suggests that these factors contribute to ongoing challenges for Olin in the global market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Olin Corp (OLN, Financial) is $28.83 with a high estimate of $70.00 and a low estimate of $20.00. The average target implies an upside of 35.18% from the current price of $21.33. More detailed estimate data can be found on the Olin Corp (OLN) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Olin Corp's (OLN, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Olin Corp (OLN, Financial) in one year is $51.16, suggesting a upside of 139.85% from the current price of $21.33. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Olin Corp (OLN) Summary page.
OLN Key Business Developments
Release Date: May 02, 2025
- Chlor Alkali Products and Vinyls EBITDA: First quarter EBITDA increased slightly with higher chlorine and caustic volumes.
- Epoxy Sales: Sequential improvement in sales due to increased resin prices and volumes, though margins were offset by higher costs.
- Winchester Division: Domestic and international military ammunition volume growth; commercial sales weak due to retailer destocking.
- Debt Refinancing: Nearest debt tranche pushed out to 2029, enhancing financial resilience.
- Capital Spending Estimate: Reduced by approximately $25 million to a range of $200 million to $220 million for 2025.
- Cost Savings Expectations: Increased to $50 million to $70 million for the full year 2025.
- Adjusted EBITDA Outlook: Second quarter 2025 expected to be in the range of $170 million to $210 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Olin Corp (OLN, Financial) exceeded expectations in its chlor alkali products and vinyls business due to industry outages, leading to increased demand.
- The company successfully refinanced its nearest debt tranche, extending maturities to 2029, enhancing financial resilience.
- Olin Corp (OLN) reported stable ECU values with positive pricing trends expected to continue into the second quarter.
- The Winchester division secured a three-year contract extension for the Lake City GoCo ammunition facility, supporting growth.
- Olin Corp (OLN) closed the acquisition of AMMO Inc.'s ammunition assets, expected to be immediately accretive and support growth.
Negative Points
- The commercial ammunition market remains weak, with retailers destocking and consumer sales declining.
- Epoxy division faces challenges with higher costs offsetting improved resin prices and volumes.
- Winchester division is impacted by rising metal costs due to tariffs, pressuring margins.
- The company anticipates a $40 million sequential chemicals turnaround expense headwind in the second quarter.
- Olin Corp (OLN) continues to navigate a challenging economic environment with significant uncertainty.
