Global specialty chemicals company Huntsman Corp. (HUN) plans to conduct a strategic review of its Textile Effects Division. Starting the first quarter of next year, the company will also consider selling the division, which is based out of Singapore.
The Chairman, President and CEO of Huntsman, Peter R. Huntsman, said, “We believe now is the right time to explore options for Textile Effects. We expect that the division will generate close to $100 million of Adjusted EBITDA in 2021, recovering much of what was lost due to COVID-19. While its value-added portfolio of sustainable products is consistent with Huntsman’s strategic direction, there may well be an external party that recognizes the value of these extremely attractive assets and will be a better owner for them.”
Further, the company’s Board has approved the implementation of a multi-year compensation plan for all officers and Vice-Presidents. The plan will be in alignment with the goals that Huntsman presented at Investor Day in November.
“We believe these changes to our compensation plan will enhance our culture of accountability and effectively incentivize our management team to deliver on our Investor Day commitments and generate enhanced shareholder value,” the CEO said.
Following the announcements, after the market closed on Tuesday, the company’s shares dropped 22.1% to end the day at $26.20.
About Huntsman Corp.
Texas-based Huntsman manufactures and sells chemical products for consumers and industrial use. It produces assorted polyurethanes, performance products, and adhesives for customers like BMW, General Electric (GE), Chevron (CVX), Procter & Gamble (PG), Unilever (UL) and Walkaroo.
Wall Street’s Take
Recently, Goldman Sachs (GS) analyst Robert Koort upgraded the rating on the stock to Buy from Hold with a price target of $43 (27.8% upside potential).
Additionally, Laurence Alexander, an analyst with Jefferies (JEF), maintained a Hold rating on Huntsman with a price target of $46 (36.7% upside potential).
The analyst expects the company to report earnings per share (EPS) of $0.95 in the fourth quarter of 2021.
Overall, the stock has a Strong Buy consensus rating based on 11 Buys and 1 Hold. The average Huntsman stock prediction of $42.17 implies 25.4% upside potential. Shares have gained 36.1% over the past year.
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