# Olin: buying 54.5% of a company that does not exist yet, at the bottom of the cycle, and the verdict is hold at $18.08 OLN, NYSE. Published November 5, 2026. Price as of the November 4, 2026 regular session close. Latest reported quarter: July to September 2026. The merger with Huntsman is expected to close in the first quarter of 2027. ## Verdict: HOLD at $18.08 At $18.08 Olin trades 28.1% below my Base value of $25.16, but above my maximum buy price of $14.46. Each Olin share will become one share of OlinHuntsman, a company that will carry about $4.5 billion of net debt into a chemical cycle that has not turned yet. The Base needs a recovery to normal earnings by 2029 and most of the promised merger savings. Confidence is C, so the required margin of safety is 42.5%. - Bear value: $7.66 - Base value: $25.16 - Bull value: $47.41 - Upside to base value: +39.1% - Maximum buy price: $14.46 (range $9.76 to $19.58 under nearby assumptions) - Required margin of safety: 42.5% - Cross-check: $21.88 a share at the peer multiple on management's 2027 forecasts, without synergies - What the price implies: normal combined EBITDA of about $1.22 billion before synergies - Market value: $3.8 billion for 208.7 million OlinHuntsman shares; Olin holders own 54.5% - Olin adjusted EBITDA: $469 million in the first nine months of 2026, about $550 to $570 million guided for the year - Combined net debt: $4.5 billion at September 30, 2026, before pensions and other claims - Dividend: $0.80 a year, a 4.4% yield - Business quality: 38.75/100 - Valuation score: 65/100 - Confidence: 15/25, grade C On November 5 Huntsman's shares traded at $9.835. Divide by the 0.5476 Olin shares each Huntsman share will become, and you get $17.96, the price of an Olin share at the same moment. The market already treats the merger as done. So the question is not what Olin is worth, but what 54.5% of OlinHuntsman is worth, a chemical company that will start life with about $4.5 billion of net debt near the bottom of its cycle. At $18.08 on the November 4, 2026 close, Olin trades 28.1% below my Base value of $25.16. The Bear value is $7.66, 57.6% below the price, and the Bull value is $47.41, 162.2% above it. I assign no probabilities to the cases. The verdict is Hold, with new money waiting for $14.46 or less. Valuation route: a cyclical chemicals company in a pending all-stock merger. One Olin share becomes one OlinHuntsman share, so I value the combined company on normalized (mid-cycle) EBITDA plus the merger savings, subtract the after-tax shortfall until earnings normalize, the cost of achieving the savings, net debt, pensions, environmental and legal liabilities and minority interests, and divide by combined shares. A peer multiple on management's 2027 forecasts is the cross-check. Values are present fair-value estimates, not 12-month price targets. ## What Olin is, and what it is becoming Olin is one of the largest producers of chlorine and caustic soda in North America, with vinyls (EDC and VCM) and epoxy resins built on that chlorine, and Winchester, the ammunition maker that also runs the U.S. Army's Lake City plant. Chlor Alkali Products and Vinyls earned $162.4 million of adjusted EBITDA in the third quarter, Winchester $42.8 million and Epoxy $11.7 million. On June 16, 2026 Olin and Huntsman agreed an all-stock merger of equals. Huntsman holders get 0.5476 Olin shares per share, Olin holders end up with about 54.5% of OlinHuntsman, Ken Lane becomes chief executive and Peter Huntsman non-executive chairman. Shareholders of both companies approved the deal on August 25, the U.S. antitrust waiting period has passed, and reviews in Europe and China continue. Closing is now expected in the first quarter of 2027, under the ticker OHN. Huntsman adds polyurethanes, including MDI, which is made with chlorine, plus performance products and advanced materials. ## The latest results | $ million | Q3 2026 | Q3 2025 | Comment | | --- | --- | --- | --- | | Olin sales | 1,747.7 | 1,713.2 | | | Olin adjusted EBITDA | 191.4 | 222.4 | $32 million lost to the Freeport VCM outage | | Olin net income | 14.4 | 43.0 | $0.13 a share | | Olin operating cash flow | 110.4 | 26.7 | | | Huntsman adjusted EBITDA | 132 | 94 | net leverage 4.7 times | Olin guided fourth-quarter adjusted EBITDA to just $80 to $100 million, citing turnaround costs of about $25 million in chlor alkali and $30 million in epoxy, year-end destocking and higher feedstock costs. That puts 2026 at about $550 to $570 million, against about $650 million in 2025. The operating problem at the Freeport VCM plant cost $72.2 million in the first nine months and ended in mid-September. Management expects year-end net debt to be about five times EBITDA or slightly higher. For 2027 management sees a firmer caustic soda market as Asian exporters face higher freight costs, announced price increases for the first quarter, very low epoxy turnaround costs and another $60 to $80 million of savings from its Beyond250 program. Winchester won more than $1 billion of military contracts in the quarter, about $600 million of it to equip the new 6.8mm ammunition line at Lake City. ## Which numbers to trust - **Adjusted EBITDA is the right yardstick, net income is not.** Interest of about $45 million a quarter and depreciation of about $115 million a quarter swamp the profit line at the bottom of the cycle. - **This year's EBITDA is depressed by one-offs.** The VCM outage, heavy turnarounds and a smaller hydrogen tax credit than in 2025 together explain most of the gap to last year. I do not add them back to 2026, but they support a recovery in 2027. - **Debt-like claims beyond bonds matter.** Pensions of $353 million, $156 million of environmental reserves at Olin, about $78 million of remaining legacy litigation payments and $246 million of minority interests at Huntsman all come before shareholders. - **Synergies are targets.** Management is highly confident in $300 million of cost savings within three years. A further $100 million depends on a chlorine supply contract that ends around 2030. I count 75% of the first and none of the second in the Base. ## Debt, claims and shares | Item | Value | | --- | --- | | Olin net debt, excluding leases, September 30, 2026 | $2,798 million | | Huntsman net debt, excluding leases, September 30, 2026 | $1,684 million | | Pensions (pro forma, March 31, 2026) and Olin environmental reserves (end of 2025), after tax | $382 million | | Remaining legacy litigation payment | about $78 million | | Huntsman minority interests | $246 million | | Olin shares | 114.0 million | | Shares issued to Huntsman holders | 94.7 million | | OlinHuntsman shares after closing | 208.7 million | On the companies' own figures, combined net leverage was 4.6 times at the end of 2025, or 3.2 times with full synergies. The bonds are spread out with none maturing before 2029, and Olin had $1.3 billion of available liquidity at the end of September. The debt is manageable, but it is what makes the equity so sensitive: every turn of EBITDA multiple moves the value by about $8 a share. ## Primary valuation: OlinHuntsman at normal earnings In the Base, the combined company earns normal EBITDA of $1.45 billion before synergies, reached in 2029, plus $225 million of the $300 million cost savings. For reference, the companies earned about $0.9 billion together in 2025 and averaged $2.3 billion in 2021 to 2025, a period that included a boom. Management's own merger forecasts showed $850 million for Olin and $524 million for Huntsman in 2027, $1.37 billion together. I value normal EBITDA at 6.5 times, below the 7.1 times median that comparable chemical companies traded at on 2027 forecasts in the merger documents. The Base value is **$25.16**. | Base value bridge | $ million | | --- | --- | | Normal EBITDA of $1,450 million plus $225 million of synergies, at 6.5 times | 10,888 | | Shortfall until earnings normalize (2027 $1,150 million, 2028 $1,350 million), after tax, discounted | -433 | | Cost to achieve the synergies, after tax | -115 | | Cash tax benefit from loss carryforwards | 100 | | Combined net debt | -4,482 | | Pensions and environmental reserves, after tax | -382 | | Remaining legacy litigation payment | -78 | | Huntsman minority interests | -246 | | Equity of $5,251 million on 208.7 million shares | $25.16 a share | - **Why $1.45 billion:** slightly above management's 2027 forecasts, because 2027 is still an early recovery year, and well below the 2021 to 2025 average, because that included record chlor alkali prices. It assumes Olin returns to roughly $950 million and Huntsman to roughly $500 million. - **Why 6.5 times:** normal earnings deserve a lower multiple than depressed ones, and the combined company is a commodity producer with high debt. - **Why a shortfall:** buying today means waiting through two more below-normal years. I discount that gap at 9%. - **Why 75% of the savings:** the $300 million is identified but not yet started, and costs of $150 to $200 million come first. Normal EBITDA and the multiple decide almost everything: | Normal EBITDA before synergies | 5.5 times | 6.5 times | 7.5 times | | --- | --- | --- | --- | | $1,150 million | $9.50 | $16.09 | $22.68 | | $1,300 million | $13.32 | $20.62 | $27.93 | | $1,450 million | $17.13 | $25.16 | $33.18 | | $1,600 million | $20.95 | $29.69 | $38.43 | | $1,800 million | $26.03 | $35.73 | $45.43 | ## Cross-check: the peer multiple on 2027 forecasts The merger documents list five comparable chemical companies (Celanese, Dow, Eastman, LyondellBasell and Westlake) at a median 7.1 times 2027 EBITDA. Applying that to management's 2027 forecasts of $1.37 billion, with no synergies, and subtracting the same debt and claims gives **$21.88** a share, 21.0% above the price. Those forecasts were made in June and assume a recovery that has not started yet, so this check depends on the same thing as the Base. ## Valuation triangulation - Primary (normal earnings plus synergies, Base): $25.16. This is the central value. - Cross-check at the peer multiple on 2027 forecasts: $21.88. - Nearby assumptions (normal EBITDA $1.3 to $1.6 billion, 6 to 7 times): $16.97 to $34.06. ## What is the market already pricing in? | Reverse valuation | Result | | --- | --- | | OlinHuntsman equity at $18.08 | $3.8 billion | | Enterprise value including debt and claims | $9.0 billion | | Multiple of my 2026 estimate of about $955 million combined EBITDA | 9.4 times | | Multiple of management's 2027 forecasts | 6.5 times | | Normal EBITDA before synergies that fits $18.08 in my Base | about $1.22 billion | The price assumes the combined company's normal earnings are only about a quarter above this year's trough, and that it gets most of its synergies. That is close to my Bear for normal earnings, which is why the Base sits well above the price. The margin of safety is wide because the Base also needs the cycle to turn on time. ## Bear, base and bull scenarios | Case | Normal EBITDA | Synergies | Multiple | Value | Versus price | | --- | --- | --- | --- | --- | --- | | Bear | $1,150 million | $150 million | 5.5 times | $7.66 | -57.6% | | Base | $1,450 million | $225 million | 6.5 times | $25.16 | +39.1% | | Bull | $1,800 million | $300 million | 7.5 times | $47.41 | +162.2% | - **Bear:** the trough lasts, with combined EBITDA of $950 million in 2027 and normal earnings of only $1.15 billion, half the savings and a 5.5 times multiple. The debt then takes most of the enterprise value. - **Base:** as described above. - **Bull:** chlor alkali tightens as Chinese exports fall and Europe closes capacity, normal earnings reach $1.8 billion, all $300 million of savings arrive and the market pays 7.5 times. All cases assume the merger closes. The further $100 million of chlorine savings from around 2030 is in none of them. ## How the buy price is set Confidence is C, which carries a default margin of safety of 42.5%. I add nothing to it, because the debt, the merger and the cycle are already in the scenarios. That gives a maximum buy price of **$14.46**. With normal EBITDA between $1.3 and $1.6 billion and a multiple between 6 and 7 times, the same margin gives buy prices from $9.76 to $19.58. The price of $18.08 is inside that range only at its optimistic end, so the decision depends on how quickly the cycle turns. The 52-week range is $14.64 to $30.46. The dividend of $0.20 a quarter yields 4.4%. Olin says its next payment will mark 100 years of uninterrupted quarterly dividends, and the merger plan promises a stable dividend, but debt reduction comes first. ## Reasons to own Olin - Trough earnings: Olin's adjusted EBITDA is down to about $560 million this year, and several of this year's hits (the VCM outage, epoxy turnarounds) do not repeat. - Supply discipline: management estimates net new chlor alkali capacity in 2026 at a few hundred thousand tons worldwide, and a European producer announced a closure in late October. - Savings already working: Beyond250 delivers $110 to $120 million in 2026 and more than $250 million a year by 2028, before any merger savings. - Winchester's military business is growing, with more than $1 billion of contracts awarded in the third quarter. - The price assumes normal earnings close to my Bear. ## What could go wrong? - Debt at the bottom of the cycle. Net leverage near five times leaves little room if 2027 is as weak as 2026. - Chinese caustic soda exports. They rose again in 2026, and management said Chinese producers are effectively selling chlorine at negative values to keep exporting. - Europe. Huntsman brings large European operations exposed to high energy costs and weak demand. - The merger. Remaining approvals, integration of two large organizations and the risk that savings take longer or cost more. - Vinyls after 2030. Olin's supply arrangement with Shintech ends around 2030, and management will only decide what replaces it by the middle to third quarter of 2027. ## Management execution - Beyond250 is on track, and epoxy has swung from a loss to a profit this year on lower costs. - The Freeport VCM problem cost $72.2 million in nine months. - The merger was agreed at market prices with no premium, and both sets of shareholders approved it by large majorities. - Excess cash goes to debt reduction, and buybacks stopped in 2026. - Guidance is specific about one-offs such as turnarounds and the VCM outage. On my ten-point management check (two points each), Olin scores 12 of 20: credit for cost discipline and clear disclosure, less for operating reliability and for adding leverage at the bottom of the cycle. ## Stock Analyza scorecard | Business quality | Score | | --- | --- | | Franchise and pricing power | 10/20 | | Return on capital over its cost | 5/20 | | Balance sheet and resilience | 3.75/15 | | Earnings quality | 7.5/15 | | Growth and reinvestment runway | 3.75/15 | | Management and capital allocation | 5/10 | | Dilution and governance | 3.75/5 | | Total | 38.75/100 | The valuation score is **65 of 100**. | Valuation score | Score | | --- | --- | | Discount to the Base (28.1%) | 50/50 | | Price against the Bear (-57.6%) | 0/30 | | What the price assumes (normal earnings between Bear and Base) | 15/20 | | Total | 65/100 | Olin owns low-cost, integrated assets in a cyclical commodity, with a defense business on the side and too much debt for the bottom of the cycle. Business quality and valuation are shown separately and are not averaged. ## Confidence score | Confidence | Score | | --- | --- | | Historical data and sources (audited reports for both companies, merger documents) | 3.75/5 | | Accounting and ownership (pro forma figures, pensions, legacy liabilities, minority interests) | 2.5/5 | | Evidence for forward assumptions (normal earnings and synergy timing are judgments) | 2.5/5 | | Model construction (two independent recomputations agree) | 3.75/5 | | Independent challenge (peer cross-check, reverse valuation, sensitivity) | 2.5/5 | | Total | 15/25, grade C | The grade measures how well the model is identified, not the chance of a loss. ## What I would watch from here Olin's fourth quarter should land inside $80 to $100 million of adjusted EBITDA without a new outage. The merger should close in the first quarter of 2027 without large asset sales demanded by regulators, and the first combined report should set out how quickly the $300 million of savings arrives. Caustic soda price increases announced for the first quarter of 2027 are the first sign of whether the cycle is turning. ### Green - First-quarter 2027 caustic price increases stick. - The merger closes on time with a detailed savings plan of at least $300 million. - Combined net leverage falls below four times by the end of 2027. ### Yellow - Closing slips past mid-2027 or regulators require asset sales. - Olin's 2027 EBITDA tracks below $700 million. - The dividend is kept but paid with borrowed money. ### Red - The merger is called off. - Combined net leverage rises above 5.5 times. - Another major unplanned outage at a core chlor alkali or vinyls site. ## The three most important thesis breakers 1. The chemical cycle stays at the bottom through 2028, so the debt absorbs the value and the outcome moves toward the Bear. 2. Caustic soda tightens quickly as Chinese exports fall and European capacity closes, which moves normal earnings toward the Bull. 3. The merger fails or its savings slip, leaving each company alone with high leverage. ## Stress test and independent check I recomputed every scenario with a separate script that builds the claims first and the normalization gap year by year, and the results match to the cent. That checks the arithmetic, not the forecasts. | Input | Status | | --- | --- | | Olin results, segments, guidance, debt, liquidity | Third quarter release, slides and call, October 29 and 30, 2026 | | Huntsman results, outlook, balance sheet | Third quarter release, Form 10-Q and call, November 2 and 3, 2026 | | Merger terms, forecasts, synergies, peer multiples, pro forma balance sheet | Joint proxy statement and prospectus, July 13, 2026 | | Environmental reserves, 2025 results | Olin Form 10-K for 2025 and fourth quarter release | | Normal EBITDA, synergy share and timing, multiple, discount rate, remaining litigation payment | My assumptions | | Remaining merger approvals, combined savings plan | Not yet reported | The weakest point is normal EBITDA, because each $100 million moves the value by about $3 a share. The strongest bull argument is that the price assumes normal earnings close to my Bear while some of this year's losses will not repeat. The strongest bear argument is that the combined company has to carry $4.5 billion of net debt through a cycle whose timing nobody controls. ## Final verdict: hold at $18.08 Olin is cheap against what OlinHuntsman should earn in a normal year, and the merger adds real savings. But the shares are a leveraged bet on the timing of the chemical cycle, and at $18.08 the price only falls inside the buy range under the more hopeful of my nearby assumptions. **Verdict: HOLD at $18.08, watchlist for new money. Base $25.16, 39.1% above the price, Bear $7.66, Bull $47.41, cross-check $21.88, Confidence C (15/25). Required margin of safety 42.5%, maximum buy price $14.46, range $9.76 to $19.58 under nearby assumptions.** New money buys only at or below $14.46. For an existing holder the original cost is irrelevant: the Base is well above the price, and the holding pays 4.4% while it waits. The cycle will pay for the debt eventually; the margin of safety is there to pay for the years before it does. ## More analyses on Patreon This analysis is free. Premium members get every in-depth analysis, the full archive and a vote on which stocks get analyzed next: https://www.patreon.com/stockanalyza ## Sources Primary sources are Olin's third quarter 2026 release, slides, earnings call and Form 10-Q (October 29 and 30, 2026), Olin's fourth quarter 2025 release and Form 10-K for 2025, Huntsman's third quarter 2026 release, slides, call and Form 10-Q (November 2 and 3, 2026), the merger announcement (June 16, 2026) and the joint proxy statement and prospectus (July 13, 2026). All were accessed through [Bigdata.com](https://bigdata.com), and both companies' filings are available on [SEC EDGAR](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000074303). The reference market price is $18.08, the November 4, 2026 NYSE close, and the 52-week range and share counts come from market data via Bigdata.com. **Disclaimer.** This analysis is provided solely for research and educational purposes. It is not personalized investment, financial, legal or tax advice. Values are estimates, not forecasts or trading instructions. Olin is exposed to chemical and commodity cycles, energy and feedstock costs, Chinese export competition, high debt, pension and environmental liabilities, merger completion and integration risk, operating outages, defense contract risk and valuation risk. Investors can lose part or all of their invested capital. Method: Master Investment Analysis Framework v4.2. Approach: the combined OlinHuntsman valued on normalized EBITDA plus synergies, less the shortfall until normalization, costs to achieve and all debt-like claims; cross-check at the peer multiple on management's 2027 forecasts. Confidence: C/15. Data checks: passed with warnings. Open data gaps: remaining merger approvals, combined savings plan, Huntsman fourth quarter results.