Olin Corporation
OLN
$17.40
+1.46%
Olin Corporation is a global chemicals and ammunition manufacturer, operating through three segments: Chlor Alkali Products and Vinyls (CAPV), Epoxies, and Winchester, with the CAPV segment being the largest, contributing around 55% of sales. As the world's largest chlor-alkali producer by capacity and the owner of the Winchester brand, a leading US ammunition manufacturer, Olin holds a unique dual identity in the basic materials sector. The current investor narrative centers on the company's strategic merger with Huntsman Corporation, announced in mid-June 2026, which has raised concerns about shareholder dilution and integration risks, while the company also faces cyclical headwinds in chemical end-markets, as reflected in its recent earnings weakness and declining stock price.…
OLN
Olin Corporation
$17.40
Related headlines
Investment Opinion: Should I buy OLN Today?
Based on the analysis, I rate OLN as a Hold. The consensus recommendation is 'Hold' with an average target price of $21.62, implying a 26.1% upside, but the deteriorating fundamentals and merger risks warrant caution. The thesis is that the stock is cheap on a PS basis, but the near-term earnings outlook is weak, and the merger adds uncertainty.
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OLN 12-Month Price Forecast
The AI assessment is bearish with medium confidence. The severe margin compression and negative earnings indicate fundamental weakness, while the stock's technical downtrend and merger uncertainty add to the risk. The low PS ratio suggests value, but the lack of near-term catalysts and the possibility of further downside make the risk/reward unattractive. An upgrade to neutral would occur if the company shows a clear path to margin recovery, such as gross margins returning to 10% or positive EPS in the next quarter. A downgrade to more bearish would occur if the dividend is cut or the merger fails.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Olin Corporation's 12-month outlook, with a consensus price target around $21.62 and implied upside of +24.2% versus the current price.
Average Target
$21.62
0 analysts
Implied Upside
+24.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$19 - $30
Analyst target range
Olin is covered by 13 analysts, with a consensus recommendation of 'Hold' and a mean recommendation score of 3.0 (where 1 is Strong Buy and 5 is Sell). The average target price is $21.62, which implies an upside of 26.1% from the current price of $17.15. The distribution includes 1 Overweight, 1 Underweight, and the rest Hold/Neutral, indicating a cautious sentiment. The target price range is from $19.00 (low) to $30.00 (high), with the high target implying a 74.9% upside, likely assuming a successful merger integration and a cyclical recovery in chlor-alkali margins, while the low target of $19.00 suggests only a 10.8% upside, reflecting concerns about continued margin pressure and integration risks. Recent ratings from institutional firms have been mostly neutral, with Wells Fargo, Citigroup, Mizuho, and BMO maintaining Equal Weight/Neutral/Market Perform, while Morgan Stanley has an Underweight, indicating a lack of strong bullish conviction. The wide spread between the low and high targets (58% difference) signals high uncertainty about the company's future, particularly regarding the Huntsman merger and the timing of a chemical industry recovery.
Bulls vs Bears: OLN Investment Factors
Olin presents a classic value trap versus contrarian opportunity debate. The bull case rests on a historically low PS ratio (0.35), a 26.1% upside to the average analyst target, and positive free cash flow, while the bear case is driven by collapsing margins (gross margin down to 1.88%), negative earnings, and the dilutive Huntsman merger. Currently, the bearish evidence is stronger given the deteriorating fundamentals and lack of near-term catalysts. The single most important tension is whether the chemical cycle trough and merger integration will lead to a recovery in margins, or whether the company faces a prolonged period of losses. If margins recover to historical levels, the stock could re-rate significantly; if not, the low valuation may persist or worsen.
Bullish
- Deep Valuation Discount: OLN trades at a price-to-sales ratio of 0.35, a 77% discount to the industry average of approximately 1.5. This is also far below its historical PS range (1.42–4.37), suggesting the market has priced in severe pessimism, potentially offering a contrarian opportunity if fundamentals stabilize.
- Analyst Target Upside: The average analyst target price is $21.62, implying a 26.1% upside from the current price of $17.15. Even the low target of $19.00 offers a 10.8% upside, indicating that sell-side analysts see limited downside from current levels.
- Positive Free Cash Flow: Despite a loss-making quarter, Olin generated $258.4 million in free cash flow in Q4 2025 (operating cash flow of $321.2 million minus capex of $62.8 million). This provides a cushion for debt servicing and dividend payments, reducing near-term liquidity risk.
- Merger Synergy Potential: The Huntsman merger, announced in June 2026, could create significant synergies in the chemicals space. If integration succeeds, it could enhance Olin's scale and cost efficiency, potentially boosting margins and earnings, which the forward PE of 21.77 already anticipates.
Bearish
- Severe Margin Compression: Gross margin collapsed to 1.88% in Q4 2025 from 9.45% a year ago, and operating margin turned negative at -3.77%. This reflects intense pricing pressure in chlor-alkali and high costs, indicating the core business is struggling to generate profits.
- Negative Earnings and ROE: Q4 2025 net income was -$85.7 million with EPS of -$0.75, and the trailing twelve-month ROE is -2.33%. The company is destroying shareholder value, and the negative trailing PE (-56.3) makes valuation metrics unreliable.
- Merger Dilution and Integration Risk: The Huntsman merger is dilutive to shareholders, as noted in the news, and integration risks are high. The stock has fallen 33.7% over the past 3 months since the announcement, reflecting market skepticism about the deal's benefits.
- Persistent Downtrend and Weak Momentum: OLN is down 24.98% over the past year and 33.71% over the past 3 months, underperforming the S&P 500 by 43.54% over the past year. The stock is trading just 0.5% above its 52-week low of $17.005, indicating strong selling pressure.
OLN Technical Analysis
Olin's stock is in a pronounced downtrend, with a 1-year price change of -24.98% and a 3-month change of -33.71%. The current price of $17.15 is near the 52-week low of $17.005, representing just 0.5% above the low and only 56.3% of the 52-week high of $30.46, indicating the stock is trading at the bottom of its range, which could signal either a value opportunity or a falling knife. The 6-month change of -32.40% and YTD change of -20.42% confirm the persistent bearish momentum, with the stock underperforming the S&P 500 by 43.54% over the past year.
Beta
1.20
1.20x market volatility
Max Drawdown
-43.1%
Largest decline past year
52-Week Range
$17-$30
Price range past year
Annual Return
-26.5%
Cumulative gain past year
| Period | OLN Return | S&P 500 |
|---|---|---|
| 1m | -6.0% | +2.7% |
| 3m | -32.9% | +1.0% |
| 6m | -28.9% | +12.0% |
| 1y | -26.5% | +18.9% |
| ytd | -19.3% | +12.5% |
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OLN Fundamental Analysis
Olin's revenue has been relatively stable but slightly declining, with the most recent quarter (Q4 2025) reporting revenue of $1.665 billion, a YoY decline of -0.37%. The multi-quarter trend shows revenue fluctuating between $1.64 billion and $1.76 billion over the past eight quarters, indicating stagnation rather than growth. Segment-wise, Chlor Alkali Products and Vinyls generated $856.4 million, Epoxies $359.3 million, and Winchester $449.4 million in the latest period, with the CAPV segment facing pricing pressures. The company's profitability has deteriorated sharply, with Q4 2025 net income of -$85.7 million and an EPS of -$0.75, compared to a net income of $10.7 million in Q4 2024. Gross margin collapsed to 1.88% in Q4 2025 from 9.45% in the year-ago quarter, and the operating margin turned negative at -3.77%, reflecting severe cost pressures and weak pricing. The balance sheet shows a debt-to-equity ratio of 1.71, which is elevated, and the current ratio of 1.21 indicates adequate liquidity. Free cash flow for the trailing twelve months was $247.9 million, but Q4 2025 operating cash flow was $321.2 million, with capital expenditures of $62.8 million, resulting in positive FCF of $258.4 million for the quarter. However, the company's ROE is negative at -2.33%, and the net margin is -0.63%, indicating that the company is not generating sufficient returns on equity.
Quarterly Revenue
$1.7B
2025-12
Revenue YoY Growth
-0.4%
YoY Comparison
Gross Margin
1.9%
Latest Quarter
Free Cash Flow
$247900000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is OLN Overvalued?
Given that Olin's trailing twelve-month net income is negative (EPS of -$0.018), the price-to-earnings ratio is not meaningful, so I selected the price-to-sales ratio as the primary valuation metric. The current PS ratio is 0.35, which is significantly below the industry average, suggesting the stock is trading at a deep discount. The forward PE ratio is 21.77, implying that the market expects earnings to recover, but the gap between the negative trailing EPS and positive forward EPS indicates high growth expectations. Compared to the chemicals industry average PS ratio of approximately 1.5 (based on historical data), Olin's PS of 0.35 represents a 77% discount, which may reflect the market's pessimism about the company's cyclical downturn and merger risks. Historically, Olin's PS ratio has ranged from 1.42 in Q4 2025 to 4.37 in Q1 2024, and the current ratio of 0.35 is far below the historical low, indicating that the stock is trading at a historically depressed valuation, which could either be a value trap or a contrarian opportunity.
PE
-56.3x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 4x~37x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are elevated. Olin's gross margin collapsed to 1.88% in Q4 2025 from 9.45% a year ago, and the company posted a net loss of $85.7 million, reflecting severe pricing pressure in chlor-alkali and high operating costs. The debt-to-equity ratio of 1.71 indicates a leveraged balance sheet, with interest expenses of $46.2 million in the quarter, which could strain cash flows if losses continue. While free cash flow was positive at $258.4 million in Q4, the trailing twelve-month FCF of $247.9 million is modest relative to the debt load, and the negative ROE of -2.33% suggests the company is not generating adequate returns on equity.