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Huntsman (HUN) Raises Q4 Outlook Owing to Higher Demand

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Huntsman Corporation (HUN - Free Report) recently announced an update to its fourth quarter outlook. The company expects fourth-quarter adjusted EBITDA to exceed its prior guidance by 20-25%.

Stronger-than-expected overall demand and higher MDI component margins have led to the increase from the previous guidance.

The fourth-quarter adjusted EBITDA for its Polyurethanes segment is expected to be better than third-quarter levels by at least 20%. For its Performance Products segment, the fourth- quarter adjusted EBITDA is expected to be higher than third-quarter figures by around 15%. For the Advanced material segment, it is expected to be in-line with third-quarter levels. For the Textile Effects segment, it is expected to be roughly in line with fourth-quarter 2019 levels.

The company continues to expect sale of around 42.5 million shares which it holds in Venator Materials PLC to funds managed by SK Capital Partners, LP before year-end 2020. Moreover, the company plans to fully redeem €445 million in aggregate principal amount of its 5.125% Senior Notes due 2021 at par with available liquidity. Redeeming the notes will lower the company’s interest expenses by around $25 million on an annual basis.

Shares of Huntsman have increased 5.3% in the past year compared with the 7.8% rise in the industry.

Huntsman is on track in integrating two downstream acquisitions completed earlier this year and delivering more than $100 million of targeted annualized savings from its cost-optimization initiative by the end of next year. The company is also focused on growth of its differentiated businesses and enhancing shareholders’ value.

 

Zacks Rank & Other Key Picks

Huntsman currently carries a Zacks Rank #3 (Hold).

Some better ranked stocks worth considering in the basic materials space are Bunge Limited (BG - Free Report) , Silvercorp Metals Inc. (SVM - Free Report) , and BHP Group (BHP - Free Report) .

Bunge has a projected earnings growth rate of 43% for the current year. The company’s shares have gained around 14% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Silvercorp has an expected earnings growth rate of 40% for the current year. The company’s shares are up around 3.7% in the past year. It currently carries a Zacks Rank #2 (Buy).

BHP has an expected earnings growth rate of around 32.4% for the current year. The company’s shares have gained around 14.8% in the past year. It currently carries a Zacks Rank #2.

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