OLN - Olin Corporation: Q1 Results May Signal A Turning Point (Rating Upgrade)

2024-04-27 02:57:12 ET

Summary

• Olin Corporation's shares have been stagnant over the past year due to weakness in the PVC market and management turmoil.
• The company's Q1 results showed some sequential growth and improved margins in its business units.
• Olin's new CEO and guidance suggest a path to gradual recovery, leading to my recommendation to buy shares after six months at hold.

Shares of Olin Corporation ( OLN ) have essentially been dead money over the past year, losing 3% of their value even as the broader market has rallied substantially. The company has struggled with weakness in the PVC market as Chinese construction activity has significantly weakened, and its own management turmoil has added to challenges. I most recently analyzed OLN in early February and have rated shares a hold, given my view guidance has not been credible but that valuation has been cheap, leaving shares around fair value. Over the 6 months I have rated Olin a hold, it has returned 9%, meaningfully below the S&P 500’s 16% gain. With a new set of results, now is an opportune time to revisit OLN. I am getting more comfortable with shares and would start to buy....

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