Zacks Investment Research downgraded Olin Corporation (OLN Quick QuoteOLN - Free Report) to a Zacks Rank #5 (Strong Sell) on Aug 30, 2016. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market.

Why the Downgrade?

Olin Corporation has failed to impress its shareholders with its lower-than-expected results in three out of last four quarters. Average earnings surprise was a negative 39.96%. Last quarter, the company’s earnings of 24 cents per share came in line with the Zacks Consensus Estimate but was below 26 cents per share recorded in the last quarter. Cost of goods sold grew 5.2% sequentially, eroding much of the benefit from 1.2% sequential rise in revenues.

For 2016, Olin Corporation anticipates its adjusted earnings before interest, tax, depreciation and amortization to come in a range of $840−$900 million. The forecast includes the adverse impacts from lower chlorinated organic sales due to weak demand from refrigerant, packaging, and agriculture customers as well as weak export pricing for ethylene dichloride. Also, the company predicts increase in raw material costs.

Over the last 30 days, the Zacks Consensus Estimate for Olin Corporation has decreased 19.5% to 33 cents per share for third-quarter 2016 and by 4.9% to $1.73 per share for 2017.

Stocks to Consider

Olin Corporation has a market capitalization of $3.6 billion. Some better-ranked stocks in the chemical industry include The Chemours Company (CC Quick QuoteCC - Free Report) , Innospec Inc. (IOSP Quick QuoteIOSP - Free Report) and Stepan Company (SCL Quick QuoteSCL - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).

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