Huntsman (HUN) Hits New 52-Week High: What's Driving It?

Shares of Huntsman Corporation (NYSE:HUN) scaled a fresh 52-week high of $33.15 on Dec 19, before closing the day at $32.82.

Huntsman has a market cap of roughly $7.9 billion. Average volume of shares traded in the last three months is around 4,236.9K. The company has an expected long-term EPS growth of 8%.

Shares of Huntsman have rallied 18.7% in the last three months, outperforming the industry’s 5.5% growth.

Driving Factors

In its third quarter earnings call, Huntsman stated 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.

Huntsman has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 32.7%.

Moreover, the company’s estimates for the current quarter and the full year, have moved north in the past 30 days, reflecting a positive outlook of analysts on the stock. Over the past month, current quarter estimates have risen from 52 cents per share to 63 cents, while current year estimates have risen from $2.61 per share to $2.65.

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 in this year and in excess of $2.6 billion since 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

Zacks Rank & Other Stocks to Consider

Huntsman currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Westlake Chemical Corporation (NYSE:WLK) , Daqo New Energy Corp. (NYSE:DQ) and Kronos Worldwide Inc. (NYSE:KRO) , each sporting a Zacks Rank #1 (Strong Buy). 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 moved up 83.8% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 151.3% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 115.1% year to date.

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