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Huntsman Scales New 52-Week High: What’s Driving the Stock?


Shares of chemicals maker Huntsman Corporation HUN scaled a fresh 52-week high of $26.54 yesterday, before pulling back to close the day at $26.33.

Huntsman has a market cap of roughly $6.3 billion and average volume of shares traded in the last three months was around 3,147.1K. The company has an expected long-term EPS growth of 7%.

Huntsman’s shares have gained 21.9% over the past three months, outperforming the Zacks categorized Chemicals-Diversified industry’s gain of 1.7%.

Driving Factors

Huntsman’s adjusted earnings of 57 cents per share for first-quarter 2017 topped the Zacks Consensus Estimate of 38 cents. Revenues of $2.5 billion also beat the Zacks Consensus Estimate of $2.4 billion. The first quarter witnessed positive business trends which led to the robust performance.

Huntsman reported adjusted EBITDA of $329 million, up from $274 million in the prior-year period factoring in the sale of the company’s European surfactants business in the fourth quarter. The company saw sequential and year over year improvement in sales volumes in most of its business segments.

As a result of the strong first quarter earnings, the company witnessed free cash flow delivery of $82 million which includes $54 million of insurance proceeds, an improvement of $95 million compared to the prior-year quarter. The company now expect to generate over $450 million of free cash flow in 2017.

For the second quarter, Huntsman expects positive trends in the overall volumes along with improved amine unit margins and better North American maleic profitability, partly offset by a moderation in upstream intermediate margins, will help keep EBITDA relatively stable on a sequential comparison basis.

The second quarter being the strongest period for the Textile Effects division, the company anticipates a seasonal increase in volumes as textile customers starts preparing for the winter season where cold weather fashions generally require use of more of chemicals and dyes. Also, the company expects strong demand in the second quarter.

Huntsman Corporation Price and Consensus

Huntsman currently sports a Zacks Rank #1 (Strong Buy).

Stocks to Consider

Other top-ranked companies in the chemical space include BASF SE BASFY, The Chemours Company CC and Kronos Worldwide Inc KRO. All the three stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

BASF has expected long-term growth of 8.6%.

Chemours has expected long-term growth of 15.5%.

Kronos has expected long-term growth of 5%.

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