Citi cuts Oiln stock price target to $30, maintains Buy rating

On Thursday, Citi adjusted its price target for Oiln (NYSE: OLN) shares, reducing it to $30.00 from the previous $34.00, while continuing to endorse a Buy rating for the stock. The adjustment comes as the stock has declined nearly 49% over the past six months, though InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value calculations. The revision follows a detailed investor lunch with Oiln’s top management, including CEO Ken Lane, CFO Todd Slater, and Director of IR Steve Keenan, where the company’s market position and future outlook were discussed at length. Notable is management’s commitment to shareholder returns, with the company maintaining dividend payments for 52 consecutive years and actively pursuing share buybacks.

Oiln’s management team shared insights into the chlor-alkali industry, suggesting that it has largely reached a bottom and that ECU values have been relatively stable for approximately six quarters, despite ongoing weakness in end markets. The conversation also touched on the recent stability in caustic soda prices and addressed concerns about potential oversupply due to new capacity additions in the industry.

The company’s leadership provided an update on Oiln’s near-term performance, affirming that the first quarter of 2025 is progressing in line with their expectations. However, they also cautioned that antidumping duty (ADD) rulings on epoxy are not a complete solution to the challenging supply/demand dynamics and current pricing issues, especially as prices struggle to rise above increasing feedstock costs.

In the Winchester segment, which deals with ammunition, Oiln acknowledged that while costs for propellant inputs have mostly been accounted for, the persistently weak consumer sentiment could continue to affect commercial ammunition sales negatively.

In light of these discussions and an assessment of the macroeconomic environment and feedstock pressures, Citi has revised its financial estimates for Oiln for fiscal years 2025 and 2026. The firm’s decision to lower the target price by $4 to $30 reflects these updated considerations and the challenges outlined by Oiln’s management. With the company’s next earnings report due on April 24, 2025, InvestingPro subscribers can access comprehensive analysis, including 8 additional ProTips and detailed financial metrics, to better understand the company’s potential trajectory.

In other recent news, Olin (NYSE:OLN) Corporation announced its 393rd consecutive quarterly dividend of $0.20 per share, set to be paid on March 14, 2025, to shareholders on record as of March 6, 2025. This move reflects the company’s ongoing commitment to providing consistent returns to its shareholders. Meanwhile, Olin has faced several analyst downgrades and price target cuts. JPMorgan downgraded the stock from Overweight to Neutral, slashing the price target from $50 to $28, citing challenges in the Winchester segment and increased production costs in other areas. BMO Capital Markets also reduced its price target from $44 to $34, maintaining a Market Perform rating due to anticipated near-term earnings pressures. Similarly, RBC Capital Markets downgraded Olin from Outperform to Sector Perform, cutting the price target to $30 from $45, highlighting delays in recovery for the Chemicals and Vinyls segment and ongoing tariff pressures. Despite these challenges, the company appointed retired General Edward Daly to its Board of Directors, bringing extensive experience in defense procurement and logistics to support Olin’s strategic growth.

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