KeyBanc Reiterates Overweight Rating on Oiln (OLN) Following CMA's Monthly Chlor-Alkali Report

KeyBanc analyst Aleksey Yefremov reiterated an Overweight rating and $56.00 price target on Oiln (NYSE: OLN).

The analyst said: "On December 30, Chemical Market Analytics (CMA) released its monthly chlor-alkali report, which showed caustic soda prices fairing better than expected. The U.S. caustic soda index fell $5/ton m/m in December, stronger than the forecast calling for a $10/ton decline.

Overall, we view the report as supportive of our constructive stance on the chlor-alkali market. We acknowledge concerns around the sustainability of chlorine prices in the long-run given recent capacity announcements (see our note here), but we believe the benefit from a potential cyclical volume recovery in the U.S. chlorine/caustic soda market is far superior. As we wrote, we are encouraged by OLN's options to mitigate these risks by its plans to move downstream into PVC with Kem One, as well as the several other similar deals it has in the pipeline. With industry operating rates in the upper-70% range, we see strong operating leverage at OLN in a cyclical recovery given it's currently running at just 55-60%. Demand is likely to continue to favor the caustic soda side of the ECU through 1H25, but we expect a recovery in chlorine in 2H25/2026 to result in a utilization liftoff. OLN continues to be our favorite way to play this dynamic, and it remains our only Overweight in commodity chemicals. Notably, valuation offers attractive upside with shares trading at just 6.1x our 2025E EBITDA."

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

Shares of Oiln closed at $33.15 yesterday.

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