A Look at Olin’s Valuation as Third-Quarter Profits Return and Business Transition Unfolds

Olin (NYSE:OLN) caught investors’ attention after reporting a return to profitability in the third quarter, due to its Chlor Alkali Products and Vinyls segment and a boost from clean hydrogen tax credits.

Although these positives have fueled the turnaround story, the company has also issued cautious guidance for the fourth quarter and continues to face difficulties in other areas of the business, creating an interesting setup for market watchers.

See our latest analysis for Olin.

Olin’s recent third-quarter rebound briefly lifted investor optimism, but share price momentum has faded amid cautious forward guidance and mixed results across segments. Despite posting solid operational improvement, Olin’s 12.94% share price return over the past 90 days has not been enough to offset longer-term weakness. Its total shareholder return is down 46.39% in the last year and 57.13% over three years. The company’s update on share repurchases and acquisition activity adds detail to the turnaround story, but the market remains hesitant as valuation and cyclical risks persist.

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With shares trading at a notable discount to some analyst price targets, but mixed financial signals and weaker guidance tempering expectations, investors must decide whether Olin’s turnaround has more room to run or if the market already reflects future growth.

Most Popular Narrative: 13.5% Undervalued

Olin's most widely followed narrative pegs its fair value above the last closing price, setting up a debate over whether the market is missing something. With meaningful discount to fair value, investors may be overlooking underlying drivers of potential upside.

Structural cost reduction initiatives (Beyond250 and Epoxy cost optimization) are expected to deliver significant operational savings, yielding an estimated $70 to $90 million run-rate benefit by the end of 2025 and additional structural cost reductions from the Stade, Germany facility in 2026. This should improve net margins and boost earnings quality.

Read the complete narrative.

Curious why this narrative leans bullish? The future valuation rests on a high-octane mix of operational savings, fatter profit margins, and a changing business formula. Intrigued by the logic that's driving this 13% plus upside? There’s a key set of projections behind the numbers—find out what they are in the full narrative.

Result: Fair Value of $24.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain. Ongoing global overcapacity and rising competition from international producers could easily stall Olin’s anticipated recovery and margin expansion.

Find out about the key risks to this Olin narrative.

Another View: Multiples Tell a Different Story

Taking a look at Olin's price-to-earnings ratio puts things into perspective. At 45.5x, it is markedly steeper than both the US Chemicals industry average of 26.4x and the peer average of 16.8x. While the fair ratio is estimated at 72x, current trading levels suggest investors are already paying a premium, which could add both risk and potential challenge to the turnaround thesis. Does the market see something others miss, or is optimism running ahead of reality?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Olin Narrative

If you think the numbers point in another direction or want to take a hands-on approach, it's easy to craft your own take in minutes. Do it your way.

A great starting point for your Olin research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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