Huntsman: Q1 Is Further Evidence The Bottom Is In
Huntsman Corporation's Q1 results indicate continued signs of recovery, with improving margins, cost reductions, and supply constraints supporting a bottoming outlook. The company reported resilient volumes and margin expansion in its Advanced Materials segment, along with benefits from Middle East supply disruptions. Despite elevated leverage, Huntsman maintains solid liquidity and is projected to generate at least $100 million in free cash flow in 2024.
- ▪Huntsman Corporation (HUN) reported sequential improvement in Q1 driven by tighter global supply and recovering end markets.
- ▪The Advanced Materials segment saw margin expansion and resilient volumes during the quarter.
- ▪Cost-cutting initiatives and supply disruptions in the Middle East contributed to improved financial performance.
- ▪Leverage stands at 6.1x due to depressed EBITDA, but liquidity is supported by a new $800 million revolver and $369 million in cash.
- ▪The analyst expects at least $100 million in free cash flow in 2024 and sets a $22 price target for HUN over a 2-3 year horizon.
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