Urethane Blog
Olin Upgrade
September 5, 2023
Olin upgraded to Overweight at KeyBanc on valuation
Sep. 05, 2023 8:44 AM ETOlin Corporation (OLN)By: Rob Williams NY, SA News Editor
Olin (NYSE:OLN) on Monday was upgraded to Overweight from a previous investment rating of Sector Weight by analysts at KeyBanc Capital Markets. They said a selloff in the chemical company on Friday was unwarranted after announcing the planned departure of CEO Scott Sutton.
“We believe shares have reached attractive levels and justify an Overweight rating,” Aleksey Yefremov, analyst at KeyBanc, said in a September 4 report. “We may be too early, given meaningful pressure on caustic soda, but believe the stock is undervalued with a 12-24 months view.”
KeyBanc set a price target of $67 a share on Olin (OLN) based on a multiple of 6.5 times estimated Ebitda for 2024.
Discussions on Pay?
The analysts said Sutton’s departure may have been related to discussions about pay.
“Our sense is that Mr. Sutton’s initial compensation package reflected turnaround status of the company at the time, while going forward the board prefers pay to be more closely in line with industry standards,” according to KeyBanc. “Mr. Sutton’s compensation was well-earned, and the stock’s reaction is just another testament to investors’ view of his value.”
Amid the pending departure, Olin (OLN) is positioned for growth, according to KeyBanc.
“Mr. Sutton was a highly successful and creative CEO for Olin (OLN), and it will be difficult to find a replacement of a similar caliber, considering the impressive performance improvement that was achieved by Olin (OLN),” KeyBanc said. “Still, having set the major parameters of the new strategy, the company is now ready to rip the benefits of the coming cyclical upside.”
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