Olin (OLN) Valuation in Focus After Citigroup Downgrade on Demand and Debt Concerns

Citigroup’s recent downgrade of Olin (OLN) to Neutral has put the spotlight on the company’s outlook. The move was driven by questions about demand in chlorine derivatives and persistent struggles in epoxy.

See our latest analysis for Olin.

Olin’s share price has drifted sideways for much of the year, with a modest pickup in recent weeks not enough to reverse a one-year total shareholder return of -0.45%. The Citigroup downgrade and ongoing sector headwinds appear to be weighing on momentum, leaving investors looking for fresh signs of stability before sentiment turns more positive.

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With Olin shares trading below recent price targets and valuation metrics offering mixed signals, the question for investors is clear: Is the market underestimating a rebound, or is it already factoring in all the potential for future growth?

Most Popular Narrative: 7.3% Overvalued

Analyst consensus pins Olin's fair value at $23.47, which is below the current share price of $25.19. This sets the stage for a debate on whether upside is capped or a turnaround is brewing.

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.

What’s fueling this controversial price? Analysts are betting on an earnings transformation, with operational shakeups and margin leaps driving their headline projections. Uncover which bold moves and financial shifts anchor this eye-catching valuation.

Result: Fair Value of $23.47 (OVERVALUE D)

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

However, ongoing global oversupply and fierce competition from low-cost producers could undermine Olin’s turnaround potential. This could put pressure on revenue and profit margins.

Find out about the key risks to this Olin narrative.

Another View: The DCF Model Shows Major Upside

While the analyst consensus sees Olin as slightly overvalued, our SWS DCF model takes a very different view. According to DCF analysis, Olin’s fair value is $66.94, which is significantly higher than its recent share price. This represents a substantial discount for a stock that many consider troubled. Is the market being overly pessimistic?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Olin Narrative

If you have your own perspective or want to dive deeper into the numbers, the tools are at your fingertips to craft a personal view in minutes. Do it your way

A great starting point for your Olin research is our analysis highlighting 3 key rewards and 2 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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