Huntsman Corporation
HUN
$14.84
+0.68%
Huntsman Corporation is a US-based manufacturer of differentiated organic chemical products, operating in the Basic Materials sector within the Chemicals industry. Its core product portfolio includes Methyl diphenyl diisocyanate (MDI), Amines, Maleic anhydride, and Epoxy-based polymer formulations, which are essential components for adhesives, aerospace, automotive, and construction products. The company is a significant player in the global chemical market, particularly as a major producer of MDI, a key material for polyurethanes, which drives the majority of its revenue. The current investor narrative centers on a challenging operational environment marked by revenue declines and profitability pressures, as evidenced by recent quarterly losses, while management's commitment to maintaining its dividend signals a focus on shareholder returns amidst cyclical headwinds in the industrial and construction end-markets.…
HUN
Huntsman Corporation
$14.84
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Investment Opinion: Should I buy HUN Today?
Rating: Hold. The core thesis is that HUN presents a high-risk, high-potential-reward cyclical turnaround play, but current fundamentals do not yet provide a clear catalyst to warrant a Buy rating, and the significant recent rally has captured much of the near-term recovery optimism.
Supporting Evidence: The stock trades at a deeply discounted 0.30x Price-to-Sales ratio, well below typical chemical industry averages. However, this discount is justified by a 6.68% YoY revenue decline and a negative trailing net margin of -4.84%. While free cash flow remains positive at $116 million TTM, profitability is absent. Analyst sentiment is neutral-to-cautious, with recent downgrades, and while they project a return to profitability (avg. EPS $0.52), this is not yet reflected in reported results. The technical rally of 65% over six months suggests the market is already anticipating some improvement.
Risks & Conditions: The two biggest risks are 1) further gross margin compression below 10%, and 2) a dividend cut if free cash flow turns negative. This Hold rating would upgrade to a Buy if quarterly revenue shows sequential growth and gross margins stabilize above 13%, signaling the cyclical trough is in. It would downgrade to a Sell if the company reports another quarter of significant net losses ($50M+) and revenue decline exceeds 5% YoY. Based on current data, the stock appears fairly valued relative to its challenged near-term prospects but undervalued relative to a normalized earnings scenario.
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HUN 12-Month Price Forecast
HUN is a classic cyclical stock at an inflection point. The valuation suggests extreme pessimism is priced in, but the fundamental picture has not yet provided confirmation of a turnaround. The stock's 65% rally from its lows has likely front-run the early stages of any recovery, leaving limited near-term upside without concrete evidence of margin expansion and revenue stabilization. The high dividend yield offers a compelling reason to hold, but its sustainability depends on a return to profitability. The stance is neutral, as the risk/reward appears balanced: significant upside exists if the cycle turns, but downside remains if the downturn persists. Confidence is medium due to the high uncertainty around the timing of the cyclical recovery. A shift to a bullish stance would require two consecutive quarters of sequential revenue growth and gross margin expansion above 14%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Huntsman Corporation's 12-month outlook, with a consensus price target around $19.29 and implied upside of +30.0% versus the current price.
Average Target
$19.29
9 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
9
covering this stock
Price Range
$12 - $19
Analyst target range
A cohort of 9 analysts covers the stock, with a consensus sentiment that is neutral to cautious, as reflected in recent institutional ratings where actions like 'Neutral', 'Sector Perform', and 'Underperform' dominate. The average analyst revenue estimate for the upcoming period is $6.511 billion, with an average EPS estimate of $0.52, implying a expected return to profitability. The target price range and specific consensus target are not provided in the data, indicating insufficient granular analyst price target data is available for a precise upside calculation. The pattern of recent ratings, including a downgrade from JP Morgan from 'Overweight' to 'Neutral' in February 2026, alongside reiterated 'Underperform' ratings from Mizuho, signals that the analyst community remains skeptical about near-term catalysts, viewing the stock as fairly valued or facing headwinds within its current challenging operating environment.
Bulls vs Bears: HUN Investment Factors
The investment debate for HUN centers on a classic value versus value trap scenario. The bull case is supported by a deeply discounted valuation at 0.30x sales, a strong technical recovery from oversold lows, and positive free cash flow that funds a high dividend. The bear case is anchored in severe and persistent fundamental deterioration, with declining revenues, negative profitability, and skeptical analyst sentiment. Currently, the bear side has stronger evidence due to the concrete, negative financial trends in revenue and margins. The single most important tension is whether the company's cyclical downturn has reached its trough, allowing for a margin recovery that validates the current low valuation, or if the revenue decline and losses will continue, justifying the stock's discounted multiple and potentially threatening the dividend.
Bullish
- Deeply discounted valuation: The stock trades at a trailing PS ratio of 0.30x and an EV/Sales of 0.82x, representing a significant discount to typical chemical industry averages. This valuation is near the bottom of its multi-year historical range, potentially pricing in an overly pessimistic scenario.
- Strong technical recovery from lows: The stock has rallied 65.02% over the past six months from its 52-week low of $7.30, demonstrating strong momentum. This rally suggests the market may be anticipating a cyclical trough and future recovery in fundamentals.
- Positive free cash flow generation: Despite net losses, the company generated $116 million in TTM free cash flow and $76 million in operating cash flow in Q4 2025. This provides financial flexibility to maintain its 8.46% dividend yield and navigate the downturn.
- Analysts expect return to profitability: The average analyst EPS estimate for the upcoming period is $0.52, implying a consensus expectation that the company will return to profitability from its current negative EPS. This forward estimate, if achieved, would justify a higher valuation.
Bearish
- Severe profitability deterioration: The company reported a net loss of $96 million in Q4 2025 with a gross margin of only 12.10%, down from 13.97% in Q3. The trailing twelve-month net margin is -4.84%, confirming the company is currently unprofitable on an annual basis.
- Persistent revenue decline: Q4 2025 revenue of $1.355 billion represents a 6.68% year-over-year decline, continuing a pattern of sequential weakness from prior quarters. This indicates ongoing pressure in key end markets like construction and automotive.
- Negative analyst sentiment and downgrades: Recent analyst actions include JP Morgan downgrading from 'Overweight' to 'Neutral' in February 2026, and Mizuho reiterating 'Underperform'. This neutral-to-cautious consensus reflects skepticism about near-term catalysts.
- High dividend payout amid losses: The 8.46% dividend yield is supported by a negative payout ratio of -0.53, meaning dividends are being paid from cash reserves rather than earnings. This sustainability is questionable if operating losses persist.
HUN Technical Analysis
The stock is in a sustained recovery trend from deeply oversold levels, having rallied 65.02% over the past six months, though it remains 15.15% higher over the past year. Currently trading at $14.06, the price sits at approximately 88% of its 52-week range ($7.30 to $15.90), indicating it is approaching the upper bounds of its recent trading band, which suggests momentum but also potential resistance near the yearly high. The short-term momentum is positive but shows signs of deceleration, with a 10.80% gain over the last three months compared to a more modest 3.00% gain over the past month, hinting at a potential consolidation phase after the sharp rally. The stock exhibits lower volatility than the broader market, with a beta of 0.636, meaning it is about 36% less volatile than the SPY, which is notable for a cyclical materials company. Key technical support is anchored at the 52-week low of $7.30, while immediate resistance is at the 52-week high of $15.90; a decisive breakout above $15.90 would signal a continuation of the bullish reversal, whereas a failure here could lead to a retest of support levels given the stock's recent 44.87% maximum drawdown.
Beta
0.64
0.64x market volatility
Max Drawdown
-44.9%
Largest decline past year
52-Week Range
$7-$16
Price range past year
Annual Return
+26.8%
Cumulative gain past year
| Period | HUN Return | S&P 500 |
|---|---|---|
| 1m | +8.2% | +4.9% |
| 3m | +24.0% | +8.9% |
| 6m | +42.4% | +9.8% |
| 1y | +26.8% | +26.9% |
| ytd | +45.6% | +10.1% |
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HUN Fundamental Analysis
Revenue is in a clear downtrend, with the most recent Q4 2025 revenue of $1.355 billion representing a 6.68% year-over-year decline, continuing a pattern of sequential weakness from Q3 2025's $1.460 billion and Q2 2025's $1.458 billion. The company's Polyurethanes segment, which drives the majority of sales, is likely facing pressure from soft demand in key end markets like construction and automotive. Profitability is severely challenged, with a net loss of $96 million in Q4 2025 and a gross margin of only 12.10%, reflecting significant compression from the 13.97% gross margin in Q3 2025; the trailing twelve-month net margin stands at -4.84%, indicating the company is currently unprofitable on an annual basis. The balance sheet shows moderate leverage with a debt-to-equity ratio of 0.99, but liquidity is adequate with a current ratio of 1.30; critically, the company generated positive free cash flow of $116 million over the trailing twelve months and an operating cash flow of $76 million in Q4 2025, providing some financial flexibility to navigate the downturn and maintain its dividend, as evidenced by the 8.46% dividend yield.
Quarterly Revenue
$1.4B
2025-12
Revenue YoY Growth
-0.06%
YoY Comparison
Gross Margin
+0.12%
Latest Quarter
Free Cash Flow
$116000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is HUN Overvalued?
Given the company's negative net income, the primary valuation metric selected is the Price-to-Sales (PS) ratio. The trailing PS ratio is 0.30, while the Enterprise Value-to-Sales (EV/Sales) is 0.82, indicating the market is valuing the company at a steep discount to its revenue base. Compared to typical chemical industry averages, which often trade at PS ratios above 1.0x, Huntsman's 0.30x PS represents a significant discount, likely reflecting concerns over its cyclical downturn, margin compression, and lack of profitability. Historically, the stock's own PS ratio has fluctuated widely, from a high above 3.0x in early 2022 to the current 0.30x; trading near the absolute bottom of its multi-year historical valuation range suggests the market is pricing in a deeply pessimistic scenario, potentially offering a value opportunity if fundamentals stabilize, but also signaling perceived fundamental deterioration.
PE
-6.3x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -136x~64x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: The primary risk is continued margin compression and unprofitability. The gross margin fell to 12.10% in Q4 2025 from 13.97% in Q3, and the company reported a $96 million net loss for the quarter. With a trailing net margin of -4.84%, HUN is burning through earnings, raising questions about the long-term sustainability of its 8.46% dividend, which is paid from a negative payout ratio. While the balance sheet shows moderate leverage (Debt/Equity of 0.99) and adequate liquidity (Current Ratio of 1.30), persistent losses could erode equity and increase leverage ratios.
Market & Competitive Risks: As a cyclical chemical company heavily exposed to construction and automotive markets, HUN faces significant macro sensitivity. The stock's low beta of 0.636 suggests it has recently been less volatile than the market, but this does not immunize it from sector-wide downturns. The key market risk is valuation compression; while the current PS ratio of 0.30x is already low, it could remain depressed or fall further if the anticipated cyclical recovery is delayed. Competitive pressures in the MDI and polyurethanes markets could further suppress pricing power and hinder margin recovery.
Worst-Case Scenario: The worst-case scenario involves a prolonged industrial recession where demand for HUN's key products remains weak, leading to further revenue declines and sustained losses. This could force a dividend cut, triggering a sell-off from income-focused investors. Combined with a re-rating to an even lower sales multiple, the stock could retest its 52-week low of $7.30. From the current price of $14.06, this represents a downside of approximately -48%. A more realistic bear-case target might align with a 20-30% decline from current levels if negative earnings trends persist for another two quarters.
FAQ
The key risks are, in order of severity: 1) Financial Risk: Continued net losses and margin compression, as seen in the Q4 2025 gross margin of 12.10% and $96M net loss, threatening dividend sustainability. 2) Cyclical/Macro Risk: Prolonged weakness in key end-markets like construction and automotive, leading to further revenue declines. 3) Dividend Cut Risk: The 8.46% yield is supported by a negative payout ratio; a cut could trigger a significant sell-off. 4) Valuation Risk: The stock may remain 'cheap for a reason' if the anticipated recovery fails to materialize, keeping the PS ratio depressed below 0.4x.
The 12-month outlook for HUN is highly dependent on the cyclical recovery of its end markets. Our base case (55% probability) sees the stock trading in a range of $13.00 to $15.50, as the company stabilizes but struggles to grow. The bull case (25% probability), involving a return to profitability and margin recovery, projects a target range of $16.50 to $18.00. The bear case (20% probability), involving deeper losses and a dividend cut, sees a retest of the $7.50 to $10.00 range. The most likely scenario is the base case, which assumes a slow, grinding recovery without major catalysts. The key assumption is that management can maintain positive free cash flow to support the dividend while awaiting a demand rebound.
HUN appears statistically undervalued based on traditional sales multiples but may be fairly valued given its poor fundamentals. Its trailing Price-to-Sales ratio of 0.30x and EV/Sales of 0.82x are significantly below typical chemical industry averages, suggesting a deep discount. However, this discount is justified by deteriorating profitability, with a trailing net margin of -4.84% and declining revenue. The market is effectively valuing the company as a distressed asset, implying skepticism about a near-term recovery. Therefore, the stock is fairly valued relative to its current challenged state but could be profoundly undervalued if a cyclical rebound restores even modest profitability.
HUN is a high-risk, potentially high-reward stock that may be suitable for specific investors. For contrarian value investors willing to bet on a cyclical recovery, the deep valuation discount (0.30x PS) and high dividend yield (8.46%) are attractive. However, it is not a 'good buy' for most investors seeking stability or growth, given its current revenue decline (-6.68% YoY) and net losses. The stock has already rallied 65% from its lows, reducing the margin of safety. A purchase should be predicated on a belief that the chemical cycle has bottomed and that analyst profit forecasts of $0.52 EPS will be realized.
HUN is unsuitable for short-term trading due to its cyclical nature, low beta (0.636), and dependence on macroeconomic trends that unfold over quarters. It is best suited for patient, long-term investors with a minimum 2-3 year horizon who can wait for the chemical cycle to turn. The high dividend yield provides an income stream while waiting, but the potential for capital appreciation is tied to a multi-quarter earnings recovery. Given the maximum drawdown of -44.87% in the past year, short-term volatility can be significant, but the lower-than-market beta suggests it may offer some relative stability during broader market downturns.