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Olin (OLN) to Reduce Chlor Alkali Capacity at Plaquemine
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Olin Corporation (OLN - Free Report) announced that it intends to permanently shut down around 20% of its diaphragm-grade chlor alkali capacity (roughly 225,000 ECU tons) at its Plaquemine, LA facility. The closure is expected to be cash flow accretive and anticipated to be completed by Jun 1, 2021.
The shutdown is the next step on Olin’s path to exit high-capital, low-return diaphragm ECUs. This will enable it to redirect its cash generation model toward transformative Parlaying and Structuring phases, the company noted.
The company also stated that it shut down 200,000 diaphragms ECU tons at its McIntosh, AL facility. The earlier announced shut down of 230,000 diaphragms ECU tons at its Freeport, TX facility will take place in the second quarter of 2021.
Shares of Olin have surged 297.4% in the past year compared with 69.3% rise of the industry.
Olin, in its last earnings call, stated that it expects adjusted EBITDA for 2021 to be between $1.8 billion and $2.1 billion.
The company also expects its recent price hike announcements for chlorine, epichlorohydrin, epoxy resins, bleach, ethylene dichloride, caustic soda and chlorinated organics to favorably contribute to its Chemicals businesses in the second quarter. The company envisions some volume offsets as it is selectively selling less into poor-quality markets. It also anticipates higher maintenance costs and unabsorbed fixed manufacturing costs of roughly $40 million related with planned Epoxy maintenance turnarounds in the second quarter.
Second-quarter adjusted EBITDA is projected to improve sequentially from first-quarter 2021 levels barring the net one-time financial benefits from Winter Storm Uri.
Olin currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Celanese Corporation (CE - Free Report) and Cabot Corporation (CBT - Free Report) .
Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 95% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected earnings growth rate of around 68.3% for the current year. The company’s shares have gained 94% in the past year. It currently sports a Zacks Rank #1.
Cabot has an expected earnings growth rate of around 126% for the current fiscal. The company’s shares have gained 83.8% in the past year. It currently flaunts a Zacks Rank #1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Olin (OLN) to Reduce Chlor Alkali Capacity at Plaquemine
Olin Corporation (OLN - Free Report) announced that it intends to permanently shut down around 20% of its diaphragm-grade chlor alkali capacity (roughly 225,000 ECU tons) at its Plaquemine, LA facility. The closure is expected to be cash flow accretive and anticipated to be completed by Jun 1, 2021.
The shutdown is the next step on Olin’s path to exit high-capital, low-return diaphragm ECUs. This will enable it to redirect its cash generation model toward transformative Parlaying and Structuring phases, the company noted.
The company also stated that it shut down 200,000 diaphragms ECU tons at its McIntosh, AL facility. The earlier announced shut down of 230,000 diaphragms ECU tons at its Freeport, TX facility will take place in the second quarter of 2021.
Shares of Olin have surged 297.4% in the past year compared with 69.3% rise of the industry.
Olin, in its last earnings call, stated that it expects adjusted EBITDA for 2021 to be between $1.8 billion and $2.1 billion.
The company also expects its recent price hike announcements for chlorine, epichlorohydrin, epoxy resins, bleach, ethylene dichloride, caustic soda and chlorinated organics to favorably contribute to its Chemicals businesses in the second quarter. The company envisions some volume offsets as it is selectively selling less into poor-quality markets. It also anticipates higher maintenance costs and unabsorbed fixed manufacturing costs of roughly $40 million related with planned Epoxy maintenance turnarounds in the second quarter.
Second-quarter adjusted EBITDA is projected to improve sequentially from first-quarter 2021 levels barring the net one-time financial benefits from Winter Storm Uri.
Olin Corporation Price and Consensus
Olin Corporation price-consensus-chart | Olin Corporation Quote
Zacks Rank & Other Key Picks
Olin currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Celanese Corporation (CE - Free Report) and Cabot Corporation (CBT - Free Report) .
Dow has a projected earnings growth rate of roughly 261.5% for the current year. The company’s shares have surged 95% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected earnings growth rate of around 68.3% for the current year. The company’s shares have gained 94% in the past year. It currently sports a Zacks Rank #1.
Cabot has an expected earnings growth rate of around 126% for the current fiscal. The company’s shares have gained 83.8% in the past year. It currently flaunts a Zacks Rank #1.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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