Huntsman Corporation
HUN
is gaining from actions to grow its downstream businesses and synergies of acquisitions. We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s see what makes this Zacks Rank #1 (Strong Buy) stock an intriguing investment option at the moment.
Price Performance
Huntsman’s shares have shot up 47.7% over the past six months, outperforming its
industry
’s rise of 31.1% over the same time frame. It has also topped the S&P 500’s roughly 19% rise over the same period.
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Estimates Northbound
Over the past two months, the Zacks Consensus Estimate for Huntsman for 2020 has increased around 12.7%. The consensus estimate for 2021 has also been revised 15.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Positive Earnings Surprise History
Huntsman has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 18.9%, on average.
Growth Drivers in Place
Huntsman benefits from its investment in downstream businesses and differentiated product innovation. The company remains focused on growing its downstream specialty and formulation businesses and is shifting its MDI (methylene diphenyl diisocyanate) business from components to differentiated systems that typically have higher margins and lower volatility.
Huntsman’s Polyurethanes segment is well positioned for strong upside in the long term on the back of its focus on ramping up its high-value differentiated downstream portfolio. Substitution of MDI for less effective materials will remain a key driving factor for the MDI business.
Huntsman should also gain from synergies of strategic acquisitions. The buyout of Demilec, a leading manufacturer and distributor of spray polyurethane foam (“SPF”) insulation systems in North America, is expected to offer significant synergies.
Moreover, the acquisition of Icynene-Lapolla, a leading North American manufacturer and distributor of SPF, is in line with Huntsman’s strategy of expanding its downstream polyurethanes business. The combination of Icynene-Lapolla with Demilec is expected to create the world’s leading supplier of spray foam products.
The company, in May 2020, also completed the acquisition of CVC Thermoset Specialties, a North American specialty chemical producer that serves industrial composites, adhesives and coatings markets. The buyout is in sync with the company’s strategy of expanding its specialty Advanced Materials portfolio.
Huntsman remains on track in integrating of two downstream acquisitions completed in 2020 and delivering more than $100 million of targeted annualized savings from its cost optimization initiative by the end of this year.
Huntsman Corporation Price and Consensus
Huntsman Corporation price-consensus-chart
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Huntsman Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include
Fortescue Metals Group Limited
FSUGY
,
Impala Platinum Holdings Limited
IMPUY
and
BHP Group
BHP
.
Fortescue has a projected earnings growth rate of 53.6% for the current fiscal. The company’s shares have surged around 157% in a year. It currently sports a Zacks Rank #1. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Impala Platinum has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have rallied around 44% in the past year. It currently carries a Zacks Rank #1.
BHP Group has a projected earnings growth rate of 43.3% for the current fiscal year. The company’s shares have gained around 24% in a year. It currently carries a Zacks Rank #1.
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