Here's Why You Should Add Huntsman (HUN) Stock to Your Portfolio
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.
Huntsman currently carries a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities for investors.
Let's see what makes this chemical maker an intriguing investment option at the moment.
Price Performance
Huntsman’s shares have popped 30.4% over the past year, outperforming its industry’s rise of 19.1% over the same time frame.
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Estimates Northbound
Over the past two months, the Zacks Consensus Estimate for Huntsman for 2021 has increased around 5.9%. The consensus estimate for third-quarter 2021 has also been revised 2.9% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Solid Growth Prospects
The Zacks Consensus Estimate for 2021 earnings of $3.15 for Huntsman suggests year-over-year growth of 221.4%. Moreover, earnings are expected to register a 178.1% growth in the third quarter.
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 15.2%, on average.
Growth Drivers in Place
Huntsman 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.
The Polyurethanes segment is well positioned for strong upside in the long term on the back of the company’s 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 significant synergies of acquisitions. Its strong liquidity and balance sheet leverage gives it adequate flexibility to continue to develop and expand its core businesses through acquisitions and internal investments.
The company expects to deliver more than $120 million of annualized savings and acquisition integration synergies by mid-2023. It achieved $27 million of targeted annualized savings in 2020.
Huntsman remains on track with the integration of CVC Thermoset and Gabriel Performance Products acquisitions. It expects these acquisitions to deliver run-rate synergies of roughly $23 million by early 2023.
Huntsman Corporation Price and Consensus
Huntsman Corporation price-consensus-chart | Huntsman Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation NUE, Nutrien Ltd. NTR and Olin Corporation OLN, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has a projected earnings growth rate of 534.4% for the current year. The company’s shares have surged around 106% in a year.
Nutrien has an expected earnings growth rate of 177.8% for the current year. The stock has also rallied around 69% over a year.
Olin has a projected earnings growth rate of 639.3% for the current year. The company’s shares have shot up around 241% in a year.
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Nucor Corporation (NUE) : Free Stock Analysis Report
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