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Shares of Olin Corporation (OLN - Free Report) scaled a fresh 52-week high of $48.50 on May 24, before closing the session at $47.75.
The company, sporting a Zacks Rank #1 (Strong Buy), has a market cap of around $7.5 billion.
The stock has surged 325.9% in the past year compared with 59.9% rise of the industry.
What’s Driving OLN?
Olin is benefiting from upbeat outlook, productivity actions, the Lake City U.S. Army contract and its investment in the Information Technology (IT) project.
Olin’s adjusted earnings of $1.53 per share in the first quarter topped the Zacks Consensus Estimate of $1.34. The company, in its last earnings call, stated that it expects adjusted EBITDA for 2021 between $1.8 billion and $2.1 billion. The company 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.
Second-quarter adjusted EBITDA is projected to increase sequentially from first-quarter 2021 levels barring the net one-time financial benefits from winter storm Uri.
Earnings estimates for Olin have also been going up in the past two months. The Zacks Consensus Estimate for 2021 has increased around 65.2%, while the same for second-quarter 2021 has gone up 83.8%. The favorable estimate revisions instill investors’ confidence in the stock.
Olin is committed toward improving its cost structure and efficiency as well as driving productivity through a number of projects. It expects productivity measures to deliver $50-$100 million of net savings in 2021.
The company also expects higher performance for its Winchester business in 2021. The Winchester segment is expected to benefit from the Lake City U.S. Army ammunition contract. The multi-year contract is expected to significantly boost annual profitability in the unit. The company expects the contract to increase Winchester's annual revenues by $450-$550 million.
Olin is also expected to gain from cost and other benefits from its investment in the IT project. The project, which involves implementation of necessary IT infrastructure, is expected to maximize cost effectiveness, efficiency and control over its global chemical operations by standardizing business processes. The company completed the IT integration project last year and expects an annual cost savings of roughly $50 million.
Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Nucor Corporation (NUE - 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 79.3% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has an expected earnings growth rate of around 229.3% for the current year. The company’s shares have gained 149% 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 surged 74.4% in the past year. It currently flaunts a Zacks Rank #1.
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Image: Bigstock
Olin (OLN) Stock Hits 52-Week High: What's Driving It?
Shares of Olin Corporation (OLN - Free Report) scaled a fresh 52-week high of $48.50 on May 24, before closing the session at $47.75.
The company, sporting a Zacks Rank #1 (Strong Buy), has a market cap of around $7.5 billion.
The stock has surged 325.9% in the past year compared with 59.9% rise of the industry.
What’s Driving OLN?
Olin is benefiting from upbeat outlook, productivity actions, the Lake City U.S. Army contract and its investment in the Information Technology (IT) project.
Olin’s adjusted earnings of $1.53 per share in the first quarter topped the Zacks Consensus Estimate of $1.34. The company, in its last earnings call, stated that it expects adjusted EBITDA for 2021 between $1.8 billion and $2.1 billion. The company 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.
Second-quarter adjusted EBITDA is projected to increase sequentially from first-quarter 2021 levels barring the net one-time financial benefits from winter storm Uri.
Earnings estimates for Olin have also been going up in the past two months. The Zacks Consensus Estimate for 2021 has increased around 65.2%, while the same for second-quarter 2021 has gone up 83.8%. The favorable estimate revisions instill investors’ confidence in the stock.
Olin is committed toward improving its cost structure and efficiency as well as driving productivity through a number of projects. It expects productivity measures to deliver $50-$100 million of net savings in 2021.
The company also expects higher performance for its Winchester business in 2021. The Winchester segment is expected to benefit from the Lake City U.S. Army ammunition contract. The multi-year contract is expected to significantly boost annual profitability in the unit. The company expects the contract to increase Winchester's annual revenues by $450-$550 million.
Olin is also expected to gain from cost and other benefits from its investment in the IT project. The project, which involves implementation of necessary IT infrastructure, is expected to maximize cost effectiveness, efficiency and control over its global chemical operations by standardizing business processes. The company completed the IT integration project last year and expects an annual cost savings of roughly $50 million.
Olin Corporation Price and Consensus
Olin Corporation price-consensus-chart | Olin Corporation Quote
Other Stocks to Consider
Some other top-ranked stocks in the basic materials space are Dow Inc. (DOW - Free Report) , Nucor Corporation (NUE - 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 79.3% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nucor has an expected earnings growth rate of around 229.3% for the current year. The company’s shares have gained 149% 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 surged 74.4% in the past year. It currently flaunts a Zacks Rank #1.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>