2023-06-27 09:34:02 ET
Olin ( NYSE: OLN ) on Tuesday was downgraded to Neutral from a previous investment rating of Buy by analysts at UBS. They said the chemical maker likely won’t be as profitable as they had expected amid softening demand.
“Olin’s ( OLN ) response to weakening prices over the past couple of years has been to reduce/idle capacity, but we see this as nearing an end,” Joshua Spector, analyst at UBS, said in a June 27 report, “and Olin ( OLN ) has less ability to influence caustic prices versus chlorine in our view, which presents spread risk that could clash with demand improvement.” Caustic soda is used for water treatment and refining petroleum, and for making textiles and paper.
UBS lowered its price target for Olin ( OLN ) to $53 a share from $68 a share previously, based on an enterprise value-to-EBITDA multiple of 5.5 times, down from about 6 times.
Olin ( OLN ) last week lowered guidance for Q2 adjusted EBITDA to $350 million to $360 million. The company pointed to an expected $50 million effect from an extended factory plant turnaround and falling demand.
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Olin downgraded to Neutral at UBS on softer demand, lower earnings