OLN: Earnings Recovery Beyond 2025 Will Drive Share Price Upside

Analysts have trimmed their price target on Olin by about $1 to roughly $28.70. This reflects reduced fair value, higher perceived risk, and softer growth and margin expectations, despite some still constructive long term views.

Analyst Commentary

Recent Street research presents a mixed but nuanced view on Olin, with some price target reductions reflecting near term headwinds and others highlighting improving valuation support and potential upside as conditions normalize beyond 2025.

While several firms have taken a more cautious stance after the Q3 earnings report and reduced near term expectations, there is also evidence of growing confidence among bullish analysts that Olin can navigate the current downcycle and ultimately deliver earnings recovery as cost actions and portfolio discipline take hold.

Bullish Takeaways

Bullish analysts lifting price targets into the $30 range point to an attractive risk reward skew, arguing that current valuation already discounts a prolonged downturn in Olin's commodity exposed businesses.
Positive commentary around post 2025 earnings power suggests that cost initiatives and operating discipline could drive margin expansion once demand stabilizes, supporting higher through cycle multiples.
Even among neutral ratings, some research notes highlight the potential for earnings recovery in 2026, indicating that the Street sees a path to improved profitability as inventory reductions and cost actions flow through.
Despite macro and end market uncertainty, bullish analysts view Olin's positioning in key chemical chains as a structural asset, with any cyclical demand recovery seen as a catalyst for multiple re rating from currently depressed levels.

What's in the News

Olin entered a strategic partnership with Braskem, signing a long-term EDC supply agreement that supports Braskem's chlor alkali and vinyl asset transformation in Brazil and advances Olin's global vinyls strategy in the high growth Brazilian PVC market (Key Developments).
The Braskem agreement enables Olin to redirect EDC volumes from its dissolved Blue Water Alliance joint venture into higher value, structural relationships, reinforcing the company's focus on leveraging its integrated chlor alkali and vinyls portfolio (Key Developments).
Olin and Mitsui agreed to end their Blue Water Alliance JV by year end, while maintaining a more flexible collaboration framework, with Olin assuring customers of a seamless transition and continued strong service across EDC and caustic soda offerings (Key Developments).
From July 1, 2025 to September 30, 2025, Olin repurchased 533,735 shares, about 0.47 percent of shares outstanding, bringing total buybacks under the July 28, 2022 authorization to 26,850,397 shares, or 21.15 percent, for approximately $1.34 billion (Key Developments).
The company reported no share repurchases under the newer buyback program announced December 12, 2024 during the same quarter, signaling continued reliance on the 2022 authorization for capital returns (Key Developments).

Valuation Changes

Fair value was trimmed slightly from about $29.33 to roughly $28.69, signaling a modest reduction in estimated intrinsic equity value.
The discount rate rose slightly from approximately 9.61 percent to about 9.92 percent, reflecting a marginally higher perceived risk profile or cost of capital.
Revenue growth edged down from around 6.11 percent to about 5.76 percent, indicating slightly softer long term top line expectations.
The net profit margin fell significantly from roughly 5.78 percent to about 3.52 percent, pointing to more cautious assumptions on earnings power and operating leverage.
The future P/E increased materially from about 9.2x to roughly 14.9x, implying that a greater share of valuation is now tied to longer dated earnings and multiple expansion assumptions.

Strategic expansion in PVC, specialty epoxies, and military ammunition positions Olin to benefit from global infrastructure, electrification, and defense trends.
Focus on pricing power, operating flexibility, and cost reductions boosts margins, cash flow, and capacity for growth investments and shareholder returns.
Structural headwinds from weak demand, cost inflation, legacy assets, regulatory risk, and material substitution threaten margins, cash flow, and long-term viability of Olin's core businesses.

Catalysts

About Olin

Manufactures and distributes chemical products in the United States, Europe, Asia Pacific, Latin America, and Canada.What are the underlying business or industry changes driving this perspective?

Olin’s entry and expansion in the PVC market through low-capital tolling arrangements positions the company to leverage accelerating global infrastructure, construction, and consumer goods demand, which could meaningfully grow revenue and incremental EBITDA as emerging markets, urbanization, and population growth drive long-term end-use consumption for its chlor-alkali and vinyl portfolio.
Strategic focus on higher-value specialty and formulated epoxy products suited for electric vehicles, wind turbines, and grid infrastructure enables Olin to participate directly in the booming electrification and decarbonization buildout, boosting both top-line sales and driving margin expansion in its Epoxy segment as demand shifts towards advanced chemical materials.
Ongoing capacity discipline across the chemical sector, combined with Olin’s “value-first” commercial approach and operating flexibility, is likely to result in improved pricing power and more stable, elevated average selling prices for caustic soda, chlorine, and derivatives, which has a direct positive impact on EBITDA and operating margins over time.
Robust domestic and international military ammunition demand, highlighted by new multi-year and extended government contracts as well as the accretive AMMO Inc. acquisition, creates a strong platform for sustained growth in Winchester earnings, supporting both revenue expansion and higher returns on invested capital as geopolitical tensions drive higher global defense spending.
Company-wide acceleration of cost reductions, automation, and productivity initiatives—outpacing original targets—position Olin to generate meaningfully higher free cash flow and EPS through improved operating leverage, supporting reinvestment in growth opportunities and potentially significant share repurchases for shareholder value creation.

Olin Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more optimistic perspective on Olin compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
The bullish analysts are assuming Olin's revenue will grow by 6.1% annually over the next 3 years.
The bullish analysts assume that profit margins will increase from 0.9% today to 5.8% in 3 years time.
The bullish analysts expect earnings to reach $452.6 million (and earnings per share of $4.37) by about July 2028, up from $61.4 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 9.2x on those 2028 earnings, down from 40.3x today. This future PE is lower than the current PE for the US Chemicals industry at 23.3x.
Analysts expect the number of shares outstanding to decline by 2.01% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.61%, as per the Simply Wall St company report.

Olin Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Olin's core chlor-alkali and epoxy businesses face sustained earnings volatility due to cyclical demand, weak downstream markets such as construction and automotive, and persistent global overcapacity—especially in epoxy where Asian competition remains intense and recent anti-dumping efforts offer little relief, which will weigh on both revenue and net margins over the long term.
The company highlighted higher cost pressures from rising raw material and energy input prices, supply chain tariffs, and operational disruptions such as plant turnarounds, which could erode profitability over time and limit sustainable improvements in earnings.
Olin is reliant on legacy manufacturing assets that require ongoing capital expenditure for maintenance and modernization, creating pressure on free cash flow and reducing its ability to invest in growth or return capital to shareholders, which may impact long-term shareholder value.
Increasing environmental and regulatory scrutiny, along with the global shift towards decarbonization and stricter water usage requirements, creates a risk of significantly higher compliance costs, potential legal liabilities, and even production restrictions, all of which threaten to compress future profit margins.
The risk of long-term demand erosion for commodity chemicals due to customer adoption of recycled, bio-based, or alternative materials, as well as intensifying competition from lower-cost producers in Asia and the Middle East, could drive structural declines in volumes and revenue as secular trends shift against Olin’s core products.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bullish price target for Olin is $29.33, which represents two standard deviations above the consensus price target of $23.87. This valuation is based on what can be assumed as the expectations of Olin's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $32.0, and the most bearish reporting a price target of just $20.0.
In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $7.8 billion, earnings will come to $452.6 million, and it would be trading on a PE ratio of 9.2x, assuming you use a discount rate of 9.6%.
Given the current share price of $21.49, the bullish analyst price target of $29.33 is 26.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystHighTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystHighTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystHighTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Global Urbanization And Electrification Will Expand Specialty Chemicals Markets