Huntsman (HUN – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Salvator Tiano from Bank of America Securities reiterated a Hold rating on the stock and has a $12.00 price target.
Salvator Tiano has given his Hold rating due to a combination of factors impacting Huntsman’s financial outlook. The company’s earnings have been under pressure, with a significant reduction in the 2025 EBITDA estimate, reflecting a major demand slowdown and continued earnings declines. The Q1 EBITDA was within guidance, but the Q2 forecast fell short of expectations, indicating unusual earnings patterns given the seasonality. Additionally, the free cash flow is expected to fall short of covering the dividend this year, prompting a reduction in the price objective.
Furthermore, the challenges in the Polyurethanes and Advanced Materials segments have led to a significant cut in 2025-26 estimates. The impact of tariffs, particularly on imports of Chinese MDI, has been a major headwind, affecting margins despite some support from US tariffs. The macroeconomic environment’s deterioration and demand slowdown have overshadowed potential benefits, leading to a cautious outlook. These factors collectively justify the Hold rating as the company faces near-term pressures with a potential for recovery in a more favorable macro environment.