Olin (OLN) AI Stock Analysis

• Market Cap: $2.54B
• Dividend Yield: 3.63%
• Average Volume (3M): 1.93M
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.43
• Revenue Growth: -4.29%
• EPS Growth: -74.85%
• Country: US
• Employees: 7,676
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Chemicals - Specialty
• EPS (TTM): 0.89
• Shares Outstanding: 115,083,115
• 10 Day Avg. Volume: 1,919,001
• 30 Day Avg. Volume: 1,933,842
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.44
• Price to Cash Flow (P/CF): 5.10
• P/FCF Ratio: 5.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $31.67
• Price Target Upside: 57.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 15

Olin's overall stock score reflects significant financial challenges, including declining revenues and negative cash flow, which weigh heavily on its financial health. The stock's technical indicators suggest bearish momentum. Despite strategic initiatives outlined in the earnings call and recent corporate events that demonstrate proactive capital management, the high P/E ratio indicates potential overvaluation, making Olin's stock a cautious investment at this time.

Positive Factors

Attractive valuation

Valuation is now highly attractive in our view at 5.1x our 2025E EBITDA and even just 7.3x 2024’s depressed EBITDA.

Cost-saving initiatives

Self-help/cost-save actions, including already completed contract improvements with Dow (largest customer), account for $250M+ of improvement.

Positive impact of tariffs

It is expected that a proposed ~40% tariff on European imports from China could lift Olin's EBITDA by at least $30mn.

Negative Factors

Challenging epoxy markets

Epoxy remains significantly challenged by subsidized Asian competition with no improvement expected shortly.

Chlor-alkali market disruptions

OLN will also have to deal with the closure of the Dow PO facility, which will probably cause some disruption in the chloralkali markets.

Impact of economic conditions

The reductions are based on analyst's view that challenges OLN faces due to the difficult economic conditions in the EU and Asia will not be able to be offset by other improvements in US markets.

Olin Business Overview & Revenue Model

Company Description

Olin Corporation is a leading vertically-integrated global manufacturer and distributor of chemical products and ammunition. Founded in 1892 and headquartered in Clayton, Missouri, Olin operates through three primary segments: Chlor Alkali Products and Vinyls, Epoxy, and Winchester. The company's chemical division produces a range of industrial chemicals such as chlorine, caustic soda, and epoxy resins, while its Winchester division is one of the largest ammunition manufacturers in the United States, serving both commercial and military markets.

How the Company Makes Money

Olin Corporation generates revenue through its three main business segments. The Chlor Alkali Products and Vinyls segment, the largest revenue contributor, produces and sells chlorine, caustic soda, and related chemicals used in a wide array of industries, from water treatment to pharmaceuticals. The Epoxy segment manufactures epoxy resins, which are critical in coatings, adhesives, and composite materials, serving industries like construction, automotive, and electronics. Lastly, the Winchester segment earns revenue through the production and sale of ammunition, supplying law enforcement agencies, military contracts, and the recreational shooting market. Olin's earnings are significantly influenced by the demand for its chemicals and ammunition, global economic conditions, and its ability to manage costs effectively. Strategic partnerships and long-term contracts, particularly in the chemical and military sectors, also play a critical role in sustaining Olin's revenue streams.

Olin Financial Statement Overview

Summary

Olin's financial performance is under pressure, with declining revenues, shrinking profit margins, and negative cash flow. Despite improved leverage, the company's ability to generate profits and cash flow has deteriorated, indicating potential operational challenges.

Income Statement

Olin's income statement highlights a significant drop in total revenue from 2022 to 2024, with a 30.3% decline over this period. The gross profit margin for 2024 was 100%, which is unusual and indicates a potential data anomaly since gross profit equals total revenue. Net profit margin fell sharply from 14.1% in 2022 to 1.7% in 2024, indicating declining profitability. This trend suggests challenges in maintaining revenue and profit levels, potentially due to market or operational issues.

Balance Sheet

The balance sheet shows a stable equity position with a debt-to-equity ratio of 1.53 in 2024, down from 1.66 in 2020, indicating improved leverage management. However, the equity ratio dropped from 30.7% in 2020 to 27.1% in 2024, suggesting a slight increase in leverage relative to assets. Return on equity decreased from 52.2% in 2022 to 5.3% in 2024, reflecting reduced profitability on shareholders' equity.

Cash Flow

Olin's cash flow statement reveals a concerning decline in free cash flow from $738.3 million in 2023 to -$195.1 million in 2024, indicating negative free cash flow generation. The absence of operating cash flow in 2024 raises red flags about the company's ability to generate cash from operations. Overall, the cash flow position has weakened significantly, posing liquidity risks.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.54B	6.83B	9.38B	8.91B	5.76B
	Gross Profit
737.50M	1.16B	2.18B	2.29B	383.40M
	EBIT
296.50M	712.10M	1.78B	1.85B	-18.50M
	EBITDA
844.30M	1.30B	2.44B	2.32B	-142.50M
	Net Income Common Stockholders
108.60M	460.20M	1.33B	1.30B	-969.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
175.60M	170.30M	194.00M	180.50M	189.70M
	Total Assets
7.58B	7.71B	8.04B	8.52B	8.27B
	Total Debt
3.15B	3.02B	2.94B	3.16B	4.23B
	Net Debt
2.97B	2.85B	2.75B	2.98B	4.04B
	Total Liabilities
5.52B	5.44B	5.50B	5.87B	6.82B
	Stockholders Equity
2.06B	2.23B	2.54B	2.65B	1.45B
Cash Flow		Free Cash Flow
308.10M	738.30M	1.69B	1.54B	119.50M
	Operating Cash Flow
503.20M	974.30M	1.92B	1.74B	418.40M
	Investing Cash Flow
-283.70M	-340.80M	-259.70M	-197.40M	-835.70M
	Financing Cash Flow
-212.60M	-656.90M	-1.65B	-1.55B	385.60M

Olin Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OLN, the sentiment is Negative. The current price of 20.1 is below the 20-day moving average (MA) of 24.26, below the 50-day MA of 26.25, and below the 200-day MA of 38.01, indicating a bearish trend. The MACD of -0.64 indicates Negative momentum. The RSI at 37.69 is Neutral, neither overbought nor oversold. The STOCH value of 27.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OLN.

Olin Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMN	75 Outperform	$9.23B	10.42	16.11%	4.10%	1.91%	2.94%
LYB	59 Neutral	$20.41B	15.19	10.69%	8.49%	-1.46%	-36.00%
DOW	58 Neutral	$24.36B	22.11	6.14%	8.90%	-3.72%	91.57%
OLN	55 Neutral	$2.54B	24.27	5.10%	3.63%	-4.29%	-74.85%
CC	53 Neutral	$1.71B	19.94	12.98%	8.76%	-4.05%	―
HUN	50 Neutral	$2.41B	―	-5.22%	7.20%	-1.23%	-277.52%
Sector *	47 Neutral	$2.64B	-3.21	-21.68%	3.30%	4.19%	-30.23%

Olin Corporate Events

Olin Corporation Issues Senior Notes and Refinances Credit

On March 14, 2025, Olin Corporation issued $600 million in 6.625% Senior Notes due in 2033, with provisions for early redemption and potential subsidiary guarantees. Concurrently, Olin refinanced its senior unsecured Credit Agreement, establishing a $650 million term loan and a $1.2 billion revolving credit facility, both maturing in 2030. These financial maneuvers aim to strengthen Olin’s capital structure and provide flexibility for future corporate needs.

Olin Announces $600 Million Senior Notes Offering

On February 28, 2025, Olin Corporation announced the pricing of its private offering of $600 million in senior notes due 2033, with a 6.625% interest rate. The offering is expected to close on March 14, 2025, and the proceeds will be used for refinancing transactions, including redeeming existing senior notes and refinancing credit facilities. This move is part of Olin’s strategy to manage its debt and improve financial flexibility, though the offering is subject to customary closing conditions and market conditions.

Olin Announces $600 Million Senior Notes Offering

On February 28, 2025, Olin Corporation announced its intention to offer $600 million in senior notes due 2033, as part of a strategy to refinance existing debt and replace its current credit facilities. The proceeds from this offering, along with new credit facilities, will be used to redeem and refinance existing notes and credit facilities, aiming to streamline its financial obligations. This move is not contingent on the closing of the new credit facilities and reflects Olin’s efforts to optimize its financial structure amid prevailing market conditions.

Olin Declares 393rd Consecutive Quarterly Dividend

On February 19, 2025, Olin Corporation’s Board of Directors declared a quarterly dividend of $0.20 per share, payable on March 14, 2025, to shareholders recorded by March 6, 2025. This decision continues Olin’s long-standing tradition of regular dividend payments, marking the 393rd consecutive quarterly dividend, reinforcing its commitment to returning value to shareholders.

Olin Announces New Ammunition Facility with U.S. Army

On February 5, 2025, Olin Corporation announced the groundbreaking of a new 6.8mm Ammunition Facility at the Lake City Army Ammunition Plant, in collaboration with the U.S. Army’s JPEO A&A and JMC. The facility is part of the Next Generation Squad Weapons Program and aims to enhance the Army’s modernization efforts. The 450,000 square-foot facility will significantly impact the defense industry by creating jobs and driving economic growth in the Kansas City region. This development reinforces Lake City’s historic role in national defense and Olin’s legacy in ammunition manufacturing.

Olin Announces VP Damian Gumpel’s Resignation

On January 15, 2025, Damian Gumpel, Vice President of Corporate Strategy at Olin Corporation, announced his resignation effective February 22, 2025. As part of his departure, Olin and Mr. Gumpel entered into a Separation Agreement, which includes benefits such as compensation for legal assistance post-departure, extended exercise periods for vested options, vesting of options as scheduled, and conditional performance share payouts, provided specific conditions are met.