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Here's Why You Should Buy Huntsman (HUN) Stock Right Now

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·4-min read
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Huntsman Corporation HUN is gaining from actions to grow its downstream businesses and synergies of acquisitions. We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it looks promising and is poised to carry the momentum ahead.

Huntsman currently carries a Zacks Rank #1 (Strong Buy) and a VGM Score  of B. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors.

Let's see what makes this chemical maker an intriguing investment option at the moment.

Price Performance

Huntsman’s shares have gained 27.4% over the past year, outperforming its industry’s decline of 8.5% over the same time frame.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Estimates Northbound

Over the past two months, the Zacks Consensus Estimate for Huntsman for 2022 has increased around 8.8%. The consensus estimate for second-quarter 2022 has also been revised 13.1% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Healthy Growth Prospects

The Zacks Consensus Estimate for 2022 earnings of $4.34 for Huntsman suggests year-over-year growth of 22.6%. Moreover, earnings are expected to register a 30.2% growth in the second quarter.

Positive Earnings Surprise History

Huntsman has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 12.6%, on average.

Growth Drivers in Place

Huntsman 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 company's Polyurethanes segment is well positioned for strong upside in the long term on the back of its 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 expects to complete the Geismar MDI splitter project in June 2022, which will expand the differentiated Polyurethanes business in the Americas.
 
Huntsman should also gain from significant synergies of acquisitions. Its strong liquidity and balance sheet leverage gives it adequate flexibility to continue to develop and expand its core businesses through acquisitions and internal investments. The recent acquisitions of CVC Thermoset and Gabriel Performance Products are significantly contributing to EBITDA in the Advanced Materials segment.

The company expects to deliver around $240 million of annualized cost optimization and acquisition run rate synergies by the end of 2023. It expects to achieve acquisitions-related run rate synergies of roughly $55 million by first-quarter 2023.

 

Huntsman Corporation Price and Consensus

 

Huntsman Corporation Price and Consensus
Huntsman Corporation Price and Consensus

Huntsman Corporation price-consensus-chart | Huntsman Corporation Quote

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Nutrien Ltd. NTR, Albemarle Corporation ALB and Cabot Corporation CBT.

Nutrien, sporting a Zacks Rank #1, has an expected earnings growth rate of 161.9% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 26.9% upward over the last 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has rallied 54% in a year.

Albemarle has a projected earnings growth rate of 190.6% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 96.3% upward in the past 60 days.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 22.5%. ALB has rallied roughly 53% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 21.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 5.2% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 14% over a year.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Albemarle Corporation (ALB) : Free Stock Analysis Report
 
Cabot Corporation (CBT) : Free Stock Analysis Report
 
Huntsman Corporation (HUN) : Free Stock Analysis Report
 
Nutrien Ltd. (NTR) : Free Stock Analysis Report
 
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