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Here's Why You Should Retain Olin Stock in Your Portfolio
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Key Takeaways
Olin expects $100 million-$120 million of 2026 savings and at least $250 million by 2028.
The Huntsman merger could add $400 million or more in cost synergies if completed.
Olin faces weak chemical demand, a $2.85 billion net debt load and negative first-half cash flow.
Olin Corporation (OLN - Free Report) has been benefiting from cost savings under its Beyond250 program, Winchester growth, improving Epoxy margins and ongoing efforts to strengthen earnings and deleverage. The planned merger with Huntsman Corporation (HUN - Free Report) is also expected to generate meaningful synergies.
However, weak global chemical demand, Asian import competition, the Freeport VCM outage, weaker EDC and export caustic soda pricing, elevated leverage, legacy Shintech payments, merger costs and negative operating cash flow could weigh on margins, free cash flow, debt reduction and near-term financial flexibility.
The company’s shares have lost 26% over a year compared with the industry’s 2.2% rise.
Image Source: Zacks Investment Research
Let’s find out why OLN stock is worth retaining at the moment.
OLN to Gain From Cost Savings and Merger Synergies
Olin’s Beyond250 program is becoming a larger structural earnings lever as the company reduces fixed costs, improves manufacturing productivity and standardizes operations. Management now expects $100 million to $120 million of savings in 2026 and at least $250 million of year-end run-rate savings by 2028, supported by site optimization, contractor reductions and roughly 600 employee and contractor position eliminations by 2026 year-end.
The planned all-stock merger with Huntsman is expected to add another $400 million or more of cost synergies and integration benefits if completed. The transaction is targeted to close in the first half of 2027 and would expand Olin’s scale and chlorine optionality while management remains focused on deleveraging.
Olin’s Growth and Margin Recovery Support Outlook
Winchester continues to benefit from the April 2025 acquisition of AMMO Inc.’s small-caliber ammunition assets, which broadened its exposure to military, law enforcement and specialty markets. In second-quarter 2026, sales rose 11.8% year over year to $500.3 million as commercial ammunition sales and military project revenue increased, while segment income rose to $28.1 million from $25 million.
Management also cited a commercial order backlog and consistent international military sales and project work. Commercial demand is expected to strengthen seasonally in third-quarter 2026, while price increases are intended to offset higher metals costs. These trends support Winchester’s long-term earnings contribution as acquired capacity and demand recovery develop.
Epoxy is showing a broader margin recovery even as global demand remains weak. Second-quarter 2026 sales increased 27.4% year over year to $422.1 million, while segment income improved to $16 million from a $23.7 million loss as pricing, volumes and lower operating costs offset higher raw material costs. For third-quarter 2026, management expects stable volume and better margins from mix, while lower U.S. hydrocarbon costs and ongoing U.S. and European price initiatives provide additional support.
Olin Faces Demand, Leverage and Cash Flow Headwinds
Olin’s chemicals businesses remain exposed to weak global demand and Asian import competition. In second-quarter 2026, Epoxy saw continued inflows of Asian imports into the United States and Europe, while management said seasonal demand was weaker than usual. Chlor Alkali Products and Vinyls’ first-half 2026 sales fell 17.2% year over year and segment income declined to $8.9 million from $143.2 million.
The Freeport VCM outage reduced second-quarter adjusted EBITDA by about $40 million and is expected to reduce third-quarter results by another $20 million. Management also expects weaker EDC and export caustic soda pricing to offset better domestic caustic pricing, leaving Chemicals results comparable to second-quarter 2026.
Olin ended second-quarter 2026 with net debt of $2.85 billion and net debt to adjusted EBITDA of 5 times versus 4.1 times at year-end 2025. It paid about $93 million toward legacy Shintech matters in the first half and expects roughly $100 million more in the second half. Acquisition-related merger costs are forecast at $35 million to $40 million for 2026. Management is targeting year-end leverage of about 4.5 times and plans to use excess cash flow for debt reduction.
Net operating cash flow was negative $40.7 million in the first half of 2026 versus positive $126.3 million a year earlier. Working capital increased $183 million during the period, although management expects seasonal working capital to be liquidated in the second half and be flat year over year, excluding Shintech payments.
The Zacks Consensus Estimate for Materion’s current-year earnings is $6.81 per share, implying a 25.2% year-over-year increase. MTRN’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6.6%.
The consensus estimate for L.B. Foster’s current-year earnings is pegged at $1.62 per share, implying a 134.8% year-over-year increase. FSTR’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average surprise being 19.9%.
View the Zacks #1 Rank List
Image: Bigstock
Here's Why You Should Retain Olin Stock in Your Portfolio
Key Takeaways
Olin Corporation (OLN - Free Report) has been benefiting from cost savings under its Beyond250 program, Winchester growth, improving Epoxy margins and ongoing efforts to strengthen earnings and deleverage. The planned merger with Huntsman Corporation (HUN - Free Report) is also expected to generate meaningful synergies.
However, weak global chemical demand, Asian import competition, the Freeport VCM outage, weaker EDC and export caustic soda pricing, elevated leverage, legacy Shintech payments, merger costs and negative operating cash flow could weigh on margins, free cash flow, debt reduction and near-term financial flexibility.
The company’s shares have lost 26% over a year compared with the industry’s 2.2% rise.
Let’s find out why OLN stock is worth retaining at the moment.
OLN to Gain From Cost Savings and Merger Synergies
Olin’s Beyond250 program is becoming a larger structural earnings lever as the company reduces fixed costs, improves manufacturing productivity and standardizes operations. Management now expects $100 million to $120 million of savings in 2026 and at least $250 million of year-end run-rate savings by 2028, supported by site optimization, contractor reductions and roughly 600 employee and contractor position eliminations by 2026 year-end.
The planned all-stock merger with Huntsman is expected to add another $400 million or more of cost synergies and integration benefits if completed. The transaction is targeted to close in the first half of 2027 and would expand Olin’s scale and chlorine optionality while management remains focused on deleveraging.
Olin’s Growth and Margin Recovery Support Outlook
Winchester continues to benefit from the April 2025 acquisition of AMMO Inc.’s small-caliber ammunition assets, which broadened its exposure to military, law enforcement and specialty markets. In second-quarter 2026, sales rose 11.8% year over year to $500.3 million as commercial ammunition sales and military project revenue increased, while segment income rose to $28.1 million from $25 million.
Management also cited a commercial order backlog and consistent international military sales and project work. Commercial demand is expected to strengthen seasonally in third-quarter 2026, while price increases are intended to offset higher metals costs. These trends support Winchester’s long-term earnings contribution as acquired capacity and demand recovery develop.
Epoxy is showing a broader margin recovery even as global demand remains weak. Second-quarter 2026 sales increased 27.4% year over year to $422.1 million, while segment income improved to $16 million from a $23.7 million loss as pricing, volumes and lower operating costs offset higher raw material costs. For third-quarter 2026, management expects stable volume and better margins from mix, while lower U.S. hydrocarbon costs and ongoing U.S. and European price initiatives provide additional support.
Olin Faces Demand, Leverage and Cash Flow Headwinds
Olin’s chemicals businesses remain exposed to weak global demand and Asian import competition. In second-quarter 2026, Epoxy saw continued inflows of Asian imports into the United States and Europe, while management said seasonal demand was weaker than usual. Chlor Alkali Products and Vinyls’ first-half 2026 sales fell 17.2% year over year and segment income declined to $8.9 million from $143.2 million.
The Freeport VCM outage reduced second-quarter adjusted EBITDA by about $40 million and is expected to reduce third-quarter results by another $20 million. Management also expects weaker EDC and export caustic soda pricing to offset better domestic caustic pricing, leaving Chemicals results comparable to second-quarter 2026.
Olin ended second-quarter 2026 with net debt of $2.85 billion and net debt to adjusted EBITDA of 5 times versus 4.1 times at year-end 2025. It paid about $93 million toward legacy Shintech matters in the first half and expects roughly $100 million more in the second half. Acquisition-related merger costs are forecast at $35 million to $40 million for 2026. Management is targeting year-end leverage of about 4.5 times and plans to use excess cash flow for debt reduction.
Net operating cash flow was negative $40.7 million in the first half of 2026 versus positive $126.3 million a year earlier. Working capital increased $183 million during the period, although management expects seasonal working capital to be liquidated in the second half and be flat year over year, excluding Shintech payments.
Olin Corporation Price and Consensus
Olin Corporation price-consensus-chart | Olin Corporation Quote
OLN’s Zacks Rank & Key Picks
OLN currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the Basic Materials space are Materion Corporation (MTRN - Free Report) and L.B. Foster Company (FSTR - Free Report) . MTRN sports a Zacks Rank #1 (Strong Buy), while FSTR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Materion’s current-year earnings is $6.81 per share, implying a 25.2% year-over-year increase. MTRN’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 6.6%.
The consensus estimate for L.B. Foster’s current-year earnings is pegged at $1.62 per share, implying a 134.8% year-over-year increase. FSTR’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average surprise being 19.9%.