On Tuesday, RBC Capital Markets adjusted its financial outlook for chemical manufacturer Huntsman Corporation (NYSE:HUN), increasing the company's price target from $24.00 to $26.00. The firm maintained its Sector Perform rating on the stock.
The revision comes as Huntsman's margins continue to face challenges, but the company anticipates quarter-over-quarter improvements across all its segments. This projection aligns with investors' reception of the first-quarter volume improvements and the guidance for the second quarter, which was seen as slightly positive and consistent with management's expectations.
RBC Capital has revised its EBITDA estimates for the second quarter, as well as for fiscal years 2024 and 2025. The new estimates are set at $130 million for the second quarter, with annual projections of $475 million for FY24 and $665 million for FY25, up from the previous estimates of $110 million, $450 million, and $617 million, respectively.
The price target has been raised to $26, based on an unchanged earnings multiple of 12 times, reflecting near-trough valuation levels. Despite this increase, RBC Capital maintains the Sector Perform rating, suggesting that the current trading levels fully reflect the stock's value.
InvestingPro Insights
As RBC Capital Markets updates its financial outlook for Huntsman Corporation (NYSE:HUN), real-time data and expert analysis from InvestingPro can provide additional context for investors. With a current Market Cap of approximately $4.29 billion, Huntsman's financial health and stock performance are key areas of focus. The company's P/E Ratio stands at -48.39, indicating that investors are willing to pay a premium for its earnings potential despite recent losses. Additionally, the Dividend Yield is notably attractive at 4.04%, which is especially relevant considering Huntsman has raised its dividend for 3 consecutive years and maintained dividend payments for 18 consecutive years, as per InvestingPro Tips.
InvestingPro Tips also highlight that analysts expect Huntsman's net income to grow this year, which may align with the company's own positive projections for quarter-over-quarter improvements. However, it's worth noting that 8 analysts have revised their earnings downwards for the upcoming period, which could signal caution for investors banking on growth. With a reputation for low price volatility, Huntsman's stock could be a consideration for investors seeking stability in their portfolios.
To gain a deeper understanding of Huntsman Corporation's financial outlook and to access additional InvestingPro Tips, investors can visit https://www.investing.com/pro/HUN. There, they will find 7 more tips that could guide their investment decisions. And for those interested in subscribing to InvestingPro for more in-depth analysis, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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