Huntsman (HUN) Offers Investors a Favorable Risk/Reward - Jefferies

Jefferies analyst Laurence Alexander reiterated a Buy rating and $49.00 price target on Huntsman (NYSE: HUN) on the belief that improving investor sentiment (activist involvement), a stronger balance sheet, a less cyclical mix, tight S/D balances, a restock cycle likely to keep demand above trend through at least through 2022 and possibly 2023, and a sharper focus on value-based pricing and improving operations, imply a favorable risk/reward that could lead to >$40 of upside in an extended cycle with only ~$18 downside in a recession.

The analyst stated "Huntsman trades at 7.3x NTM EBITDA, in line with the 5-year average and ~10% above the 10-year average. We believe this valuation range is sustainable until either consumer demand significantly weakens or there is enough consistency from the Fed after 2-3 rate hikes to shift consensus to the view the tightening cycle will continue until the fundamentals break down. Our $49 target (7x 2023E EBITDA) is conservative".

For an analyst ratings summary and ratings history on Huntsman click here. For more ratings news on Huntsman click here.

Shares of Huntsman closed at $41.16 yesterday.

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