We came across a bullish thesis on Huntsman Corporation on Unfair Advantage’s Substack by AK. In this article, we will summarize the bulls’ thesis on HUN. Huntsman Corporation’s share was trading at $11.72 as of January 26th. 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 reliance on any single sector. Its margin profile has historically been more stable and higher than peers, driven by the amines segment, which are specialty chemicals with approximately 20% EBITDA, compared to basic polyurethanes that generate around 10% EBITDA. Currently, Huntsman is navigating a cyclical downturn, with chemical prices remaining depressed, but volumes have been rising steadily over the last 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 consistent stock buybacks. Competitive pressures remain a consideration, particularly from lower-cost producers in China and India, which could challenge pricing and market share. However, trends toward manufacturing onshoring could potentially increase domestic demand and support revenue growth if these macro shifts 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 improving volumes, stable specialty margins, and potential tailwinds from onshoring makes Huntsman a company worth monitoring, as it may present attractive opportunities for investors seeking exposure to specialty and basic chemicals with a risk-adjusted growth profile. Overall, Huntsman represents a measured investment case, balancing near-term cyclical headwinds with longer-term structural opportunities and strong financial discipline.
Previously, we covered a bullish thesis on Eastman Chemical Company (EMN) by Necessary-Damage5658 in November 2024, highlighting EMN’s edge from export control changes and compliance-driven demand. EMN’s stock has depreciated by 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, specialty margins, and shareholder-friendly capital allocation.
