Olin Corp Faces Challenges: Sell Rating Due to Weak Guidance, Inventory Issues, and High Leverage

Morgan Stanley analyst Vincent Andrews maintained a Sell rating on Olin yesterday and set a price target of $20.00.

Vincent Andrews has given his Sell rating due to a combination of factors that indicate potential challenges for Olin Corp. in the near term. The company’s guidance for the fourth quarter is significantly below market expectations, with anticipated EBITDA figures falling short of consensus estimates. This discrepancy suggests that the market may need to adjust its expectations downward, which could negatively impact investor sentiment.
Additionally, Olin is facing inventory management issues, with excess inventory levels potentially affecting costs and financial performance. The company’s leverage is also a concern, as it approaches a net debt to EBITDA ratio of nearly 4x, which may limit its financial flexibility. These factors, combined with the need for more focus on balance sheet management rather than shareholder returns, contribute to the cautious outlook and the Sell rating.