Truist sets Oiln stock at hold with $38 price target

On Monday, Truist Securities began coverage on shares of Oiln (NYSE: OLN), assigning a Hold rating and setting a price target of $38.00, joining seven other analysts who recently revised their earnings expectations downward. Trading at a P/E ratio of 26.1x, the firm's analyst pointed out the company's adoption of a "value over volume" commercial strategy for its core Chlor Alkali Products and Vinyls (CAPV) business. This approach is anticipated to be beneficial in the long term, potentially leading to greater earnings potential compared to its competitors as the demand recovery unfolds. According to InvestingPro analysis, Olin (NYSE:OLN) appears to be currently undervalued.

The analyst noted that Oiln's efforts to optimize its asset footprint, cost structure, and operating rates are likely to be an extended multiyear process. With a current ratio of 1.4 and a strong free cash flow yield of 15%, the company maintains financial flexibility during this transition. At the current stage, this warrants a valuation multiple that is lower than both its peers and Oiln's own historical average. Despite this cautious stance, Truist Securities acknowledged the potential for Oiln's cash conversion to stabilize or improve.

Truist Securities also highlighted the positive aspects of Oiln's approach to capital allocation, which is considered shareholder-friendly. This is evidenced by the company's impressive 51-year streak of consecutive dividend payments and management's aggressive share buyback program, as noted in InvestingPro's analysis. The initiation of coverage with a Hold rating reflects a balanced view of the company's prospects, recognizing both the challenges and strengths in Oiln's strategy and operations.

Investors and market watchers will be keeping an eye on Oiln's performance, particularly in how effectively the company can implement its long-term strategy and navigate the multiyear process of operational optimization. The $38.00 price target set by Truist Securities will serve as a benchmark for evaluating Oiln's progress and potential for earnings growth as the market and demand dynamics continue to evolve. For deeper insights into Olin's valuation and growth prospects, including 8 additional ProTips and comprehensive financial analysis, explore the full research report available on InvestingPro.

In other recent news, Olin Corporation has been the subject of several significant developments. The company's Vice President of Corporate Strategy, Damian Gumpel, has announced his resignation. Meanwhile, Olin's earnings and revenue performance have attracted attention from multiple analysts. RBC Capital Markets adjusted its EBITDA estimates for the fourth quarter and full year of 2025 to $160 million and $1.10 billion, respectively, while BofA Securities has upgraded Olin's stock from Neutral to Buy, citing the company's attractive valuation and strong free cash flow yield.

KeyBanc Capital Markets maintained an Overweight rating on Olin's shares, adjusting its price target amid a modest rebound in caustic soda prices. Conversely, Mizuho (NYSE:MFG) reduced its price target for Olin, citing challenging market conditions and an anticipated reduction in earnings. Despite this, Olin has announced a mid-cycle EBITDA target of $2 billion over the next five years, a substantial increase from the estimated $855 million for 2024.

Olin has also increased its share repurchase program to $2 billion and announced leadership changes with the retirement of Dana O’Brien, Senior Vice President and Chief Legal Officer, and the appointment of Angela M. Castle as her successor. These are all recent developments that investors should consider.

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