Huntsman Stock Hits Nearly Four-Year High on Possible Sale of Textile Division

Huntsman’s shares hit their highest level in nearly four years after the U.S.-based manufacturer of differentiated organic chemical products announced that it will begin a strategic review of its Singapore-headquartered Textile Effects division, including a possible sale of the unit.

The Woodlands, Texas-based company said the review will begin early in the first quarter of 2022.

“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,” said Peter R. Huntsman, Chairman, President and CEO.

“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.”

Following this announcement, Huntsman climbed to an almost four-year high, rising nearly 4% to $34.95 on Wednesday. It surged over 38% so far this year.

Analyst Comments

“We see Huntsman as having the best cyclical recovery potential in the Chemicals sector, bolstered by a strong and flexible balance sheet that provides strategic optionality. Importantly, we believe the risk/reward is positively skewed as the market appears to be pricing in trough MDI conditions, limiting downside risk, while a faster than expected recovery across the construction end-market (key end-use of MDI) could result in higher volumes and margins than currently expected,” noted Angel Castillo, equity analysts at Morgan Stanley.

Huntsman Stock Price Forecast

Twelve analysts who offered stock ratings for Huntsman in the last three months forecast the average price in 12 months of $42.17 with a high forecast of $59.00 and a low forecast of $32.00.

The average price target represents a 21.21% change from the last price of $34.79. Of those 12 analysts, 11 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $40 with a high of $49 under a bull scenario and $25 under the worst-case scenario. The firm gave an “Overweight” rating on the speciality chemical maker’s stock.

Several other analysts have updated their stock outlook. Jefferies raised the target price to $46 from $44. UBS lifted the price objective to $44 from $38. Deutsche Bank upped the price target to $40 from $38.

Technical analysis also suggests it is good to buy as 100-Day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

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