Huntsman (HUN) Stock Up 23% in 3 Months: What's Driving It?

Shares of Huntsman Corporation HUN have moved up around 23% over the last three months. The company has also outperformed its industry’s gain of roughly 7% over the same time frame.  

 

 

Huntsman has a market cap of roughly $7.9 billion and average volume of shares traded in the last three months is around 4,278.2K. The company has an expected long-term earnings per share growth of around 8%.

Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.

Driving Factors

Huntsman, during third-quarter earnings call, said that despite the termination of its merger of equals deal with Clariant, the company’s business continues to improve across the board. The company remains focused on expanding its margins, generating strong free cash flow and growing its downstream differentiated and specialty businesses.

The company recently completed its secondary public offering of Venator, receiving net proceeds of roughly $471 million. The company will use the proceeds along with cash in hand to fully repay the remaining $511 million on its Term Loan B due 2023.

Notably, Huntsman will not have any senior secured term loans remaining outstanding under its senior credit facilities. The company’s annual cash interest expense is estimated to reduce by roughly $20 million, incremental to the previously reported annualized interest savings achieved this year of roughly $70 million resulting from prior debt repayments.

According to Huntsman, the monetization of Venator together with free cash flow alone will have repaid debt of roughly $2.1 billion this year and in excess of $2.6 billion since the start of 2016. The company remains focused on generating free cash flow of $400-$600 million per year and is yet to monetize the balance interest in Venator of roughly 55%.

Huntsman Corporation Price and Consensus

 

Huntsman Corporation Price and Consensus | Huntsman Corporation Quote

 

Other Stocks to Consider

Some other top-ranked stocks in the basic materials space are Westlake Chemical Corporation WLK, Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have soared 86.9% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have rallied a whopping 179.8% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have surged 117.7% year to date.

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