We came across a bullish thesis from Huntsman Corporation on AK’s Unfair Advantage Substack. In this article we will summarize the bulls’ thesis on HUN. Huntsman Corporation shares were trading at $11.72 on January 26. HUN’s Forward P/E was 153.85 according to Yahoo Finance.
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Huntsman Corporation is a diversified chemical manufacturer specializing in organic compounds, primarily polyurethanes and amines, serving a wide range of end markets and reducing dependence on a single sector. Historically, its margin profile has been more stable and higher than its peers, driven by the amines segment, which are specialty chemicals with about 20% of EBITDA, compared to basic polyurethanes that generate about 10% of EBITDA. Huntsman is currently going through a cyclical downturn, and chemical prices remain low, but volumes have increased steadily over the past two to three quarters, indicating underlying demand resilience.
The company has also been disciplined in returning capital to shareholders, reducing shares outstanding from 243 million in 2015 to 172 million today, reflecting ongoing share buybacks. Competitive pressures remain a consideration, particularly from lower-cost producers in China and India, which could challenge pricing and market share. However, trends towards offshoring of the manufacturing sector could potentially increase domestic demand and support income growth if these macroeconomic changes materialize. While Huntsman faces both cyclical and structural challenges, its diversified portfolio, resilient specialty chemicals business and shareholder-friendly capital allocation provide a solid foundation.
The combination of improved volumes, stable specialty margins and potential tailwinds from offshoring make Huntsman a company worth monitoring as it may present attractive opportunities for investors seeking exposure to commodity and specialty chemicals with a risk-adjusted growth profile. Overall, Huntsman represents a measured investment case, balancing short-term cyclical headwinds with longer-term structural opportunities and strong financial discipline.
Previously, we covered a bullish thesis on Eastman Chemical Company (EMN) by Needed-Damage5658 in November 2024, highlighting EMN’s advantage in the face of changes in export control and compliance-driven demand. REM shares have depreciated 31.84% since then due to sector weakness and cyclical headwinds. AK shares a similar bullish view on Huntsman Corporation (HUN), but focuses on its diversified portfolio, specialized margins, and shareholder-friendly capital allocation.