We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Huntsman (HUN) Up 15% in 3 Months: What's Driving the Stock?
Read MoreHide Full Article
Huntsman Corporation’s (HUN - Free Report) shares are up 14.9% over the past three months. The chemical maker, carrying a Zacks Rank #2 (Buy), has also outperformed its industry’s rise of 10.9% over the same time frame. Moreover, it has topped the S&P 500’s 8% rise over the same period.
Let’s delve deeper into the factors behind the stock’s price appreciation.
What’s Going in HUN’s Favor?
Forecast-topping earnings performance in the fourth quarter of 2020 and upbeat prospects for 2021 have contributed to the run-up in the company's shares. Huntsman’s profits rose roughly 17% year over year to $360 million or $1.54 per share in the fourth quarter.
Adjusted earnings per share of 51 cents topped the Zacks Consensus Estimate of 44 cents. Revenues rose 1% year over year to $1,668 million and also surpassed the Zacks Consensus Estimate of $1,635.2 million.
The company benefited from higher sales in its Polyurethanes segment in the quarter. Huntsman, in its fourth-quarter call, said that it is witnessing improvements over 2020 in most of its core markets. It is seeing continued improvement in demand trends across automotive and construction markets. Factoring in favorable demand trends, the company expects Polyurethanes segment results to materially improve year over year in 2021.
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.
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. 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 expects the integration of the Icynene-Lapolla buyout to complete by second-half 2021, leading to more than $20 million of annualized synergies. Moreover, the CVC Thermoset acquisition is projected to deliver run-rate synergies of around $15 million by the end of this year. The recently acquired Gabriel Performance Products is also expected to deliver around $8 million of synergies by early 2023.
Earnings estimates for Huntsman have also been going up over the past two months. The Zacks Consensus Estimate for 2021 has increased around 13.5% while the same for first-quarter 2021 has gone up 47.5%. The favorable estimate revisions instill investor confidence in the stock.
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and United States Steel Corporation (X - Free Report) .
Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have surged around 187% 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.
BHP Group has a projected earnings growth rate of 76.8% for the current fiscal year. The company’s shares have shot up around 136% in a year. It currently carries a Zacks Rank #1.
U.S. Steel has an expected earnings growth rate of 156.8% for the current year. The company’s shares have surged around 354% in the past year. It currently carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Bigstock
Huntsman (HUN) Up 15% in 3 Months: What's Driving the Stock?
Huntsman Corporation’s (HUN - Free Report) shares are up 14.9% over the past three months. The chemical maker, carrying a Zacks Rank #2 (Buy), has also outperformed its industry’s rise of 10.9% over the same time frame. Moreover, it has topped the S&P 500’s 8% rise over the same period.
Let’s delve deeper into the factors behind the stock’s price appreciation.
What’s Going in HUN’s Favor?
Forecast-topping earnings performance in the fourth quarter of 2020 and upbeat prospects for 2021 have contributed to the run-up in the company's shares. Huntsman’s profits rose roughly 17% year over year to $360 million or $1.54 per share in the fourth quarter.
Adjusted earnings per share of 51 cents topped the Zacks Consensus Estimate of 44 cents. Revenues rose 1% year over year to $1,668 million and also surpassed the Zacks Consensus Estimate of $1,635.2 million.
The company benefited from higher sales in its Polyurethanes segment in the quarter. Huntsman, in its fourth-quarter call, said that it is witnessing improvements over 2020 in most of its core markets. It is seeing continued improvement in demand trends across automotive and construction markets. Factoring in favorable demand trends, the company expects Polyurethanes segment results to materially improve year over year in 2021.
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.
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. 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 expects the integration of the Icynene-Lapolla buyout to complete by second-half 2021, leading to more than $20 million of annualized synergies. Moreover, the CVC Thermoset acquisition is projected to deliver run-rate synergies of around $15 million by the end of this year. The recently acquired Gabriel Performance Products is also expected to deliver around $8 million of synergies by early 2023.
Earnings estimates for Huntsman have also been going up over the past two months. The Zacks Consensus Estimate for 2021 has increased around 13.5% while the same for first-quarter 2021 has gone up 47.5%. The favorable estimate revisions instill investor confidence in the stock.
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and United States Steel Corporation (X - Free Report) .
Fortescue has a projected earnings growth rate of 107.8% for the current fiscal. The company’s shares have surged around 187% 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.
BHP Group has a projected earnings growth rate of 76.8% for the current fiscal year. The company’s shares have shot up around 136% in a year. It currently carries a Zacks Rank #1.
U.S. Steel has an expected earnings growth rate of 156.8% for the current year. The company’s shares have surged around 354% in the past year. It currently carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>