Huntsman: Undervalued With Free Cash Flow Poised For An Inflection

Huntsman remains a "Buy" despite a 20% share price decline, supported by improving market fundamentals and merger synergies with Olin. Q2 results showed revenue up 14% to $1.7 billion and adjusted EBITDA up $46 million, but free cash flow was disappointing due to working capital outflows. Segment strength in polyurethanes and advanced materials, especially from aerospace and power, underpins the investment case amid resilient end-market demand. I expect HUN to benefit from tightening chemical markets, merger synergies, and free cash flow recovery, targeting a rally towards $15 per share.

Shares of Huntsman Corporation (HUN) have been a muted performer over the past year as the chemicals sector has faced a prolonged downturn, pressuring margins and balance sheets.