Huntsman Issues Update on Q3 Guidance on Improved Demand

Huntsman Corporation HUN has announced updates on its third-quarter 2020 guidance. The company expects adjusted EBITDA in the Polyurethanes segment to be at least 40% better compared with previous guidance provided during second-quarter earnings call.

Per Huntsman, the improved outlook reflects continued strength in construction related markets as well as better-than-expected improvement in automotive demand and higher overall margins. Further, the company's other divisions are expected to be roughly in line with its earlier announced guidance given in July.

Huntsman's shares have lost 0.9% in the past year against the industry’s 3.1% rise.

In July, the company stated that it expects adjusted EBITDA for Polyurethanes to decline around 30% year over year in the third quarter. Adjusted EBITDA in the Advanced Materials unit is forecast to be lower both sequentially and on year-over-year basis. The same in Performance Products unit is predicted to be lower on year-over-year basis, but roughly flat sequentially. Moreover, adjusted EBITDA is expected to be positive in the Textile Effects unit in the third quarter.

Further, Huntsman stated that the integration for recent acquisitions, CVC Thermoset Specialties and Icynene-Lapolla, is ahead of plans and the company expects to achieve total annualized targeted synergies of $35 million for these acquisitions by the end of 2021. Including these synergies related to acquisitions, Huntsman plans to achieve more than $100 million of targeted annualized savings by the end of next year.

Zacks Rank & Key Picks

Huntsman currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Eldorado Gold Corporation EGO and Yamana Gold Inc. AUY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Kinross has an expected earnings growth rate of 100% for 2020. The company’s shares have surged 77.7% in the past year.

Eldorado Gold has an expected earnings growth rate of 2,325% for 2020. Its shares have returned 27.9% in the past year.

Yamana has an expected earnings growth rate of 76.9% for 2020. The company’s shares have soared 81.6% in the past year.

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