Citi analyst reiterated a Neutral rating and $22.00 price target on shares of Huntsman (NYSE: NYSE:HUN). Huntsman sees Advanced Materials as a potential growth area. However, any significant moves in mergers and acquisitions are expected to be on hold as the company prioritizes maintaining a strong balance sheet, with a current ratio of 1.47.
Citi's reiteration of the Neutral rating and price target reflects the firm's assessment of these factors and their potential impact on Huntsman's business going forward.
InvestingPro's comprehensive analysis, including its Fair Value model, suggests the stock is currently fairly valued. For deeper insights into Huntsman's financial health and growth prospects, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers. The price target suggests a level of stability in the company's stock value as per the current analysis.
In addition to housing and China's economy, the impact of U.S. tariffs was also a topic of discussion. It was noted that while Huntsman may not be directly affected by these tariffs, the broader economic effects, especially on countries like China, could have an indirect influence on the company.
The analysts also touched upon the market dynamics of Methylene diphenyl diisocyanate (MDI), a key product for Huntsman. The company pointed out that virtually all MDI produced in the United States is used domestically, with consumers typically purchasing just enough to meet immediate project needs. This suggests a stable demand within the country.
However, the company anticipates a slower year-end due to various market factors. The company has initiated a $50 million cost reduction program in its global polyurethanes business and received a $35 million dividend from its SLIC China JV acquisition. Huntsman Corporation remains cautiously optimistic about gradual market improvements in 2025, with a major turnaround planned at the Rotterdam facility in late Q1 2025.
Despite these developments, the company faces challenges in implementing recent MDI price hikes and is experiencing sluggish demand in automotive, industrial, and aerospace sectors. On a positive note, improvements in North American housing and construction could significantly impact earnings, and opportunities in EV battery markets and energy efficiency are being explored.
In addition to these updates, the company is considering using improved free cash flow for share buybacks or mergers and acquisitions. These are some of the recent developments at Huntsman Corporation as it navigates a complex market landscape while preparing for potential growth opportunities in 2025.
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