Stock Analysis & Valuation Huntsman Corporation (HUN)

• Previous Close: $10.82
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	9.14	-16
Intrinsic value (DCF)	6.52	-40
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Huntsman Corporation (NYSE: HUN) is a global leader in differentiated organic chemical products, serving diverse industries such as adhesives, aerospace, automotive, construction, electronics, and textiles. Headquartered in The Woodlands, Texas, Huntsman operates through four key segments: Polyurethanes, Performance Products, Advanced Materials, and Textile Effects. The company's product portfolio includes polyurethane chemicals, epoxy resins, amines, and textile dyes, catering to high-growth applications like insulation, coatings, and sustainable materials. With a strong presence in international markets, Huntsman leverages innovation and operational efficiency to meet evolving industrial demands. As a key player in the Basic Materials sector, Huntsman is strategically positioned to benefit from trends in lightweight materials, energy efficiency, and eco-friendly solutions. Despite cyclical industry challenges, the company maintains a resilient business model supported by diversified end markets and technological expertise.

Investment Summary

Huntsman Corporation presents a mixed investment case. The company's diversified chemical portfolio and exposure to high-growth industries like construction and automotive provide stability, but recent financial performance reflects challenges, including a net loss of $189 million in the latest fiscal year. A market cap of ~$1.98 billion and a beta of 0.836 suggest moderate volatility relative to the broader market. While operating cash flow of $263 million indicates liquidity, high total debt ($2.24 billion) raises leverage concerns. The dividend yield (~5% based on a $1/share payout) may appeal to income investors, but sustainability depends on earnings recovery. Long-term prospects hinge on demand for sustainable chemicals and cost management amid raw material inflation.

Competitive Analysis

Huntsman competes in the fragmented specialty chemicals industry, where differentiation through innovation and application expertise is critical. Its Polyurethanes segment benefits from scale in MDI (methyl diphenyl diisocyanate) and polyols, serving insulation and automotive markets. However, commoditization risks persist in certain product lines. The Advanced Materials segment holds an edge in high-performance epoxy resins for aerospace and composites, but R&D costs are high. Textile Effects faces stiff competition from low-cost Asian producers. Huntsman’s vertical integration (e.g., propylene oxide production) provides cost advantages, but reliance on cyclical end markets (e.g., construction) creates earnings volatility. Sustainability initiatives, like bio-based polyurethanes, could strengthen its positioning against rivals focused on ESG-driven demand. Geographic diversification mitigates regional downturns, but pricing pressure from larger competitors like BASF remains a challenge.

Major Competitors

• BASF SE (BASFY): BASF is a global chemical giant with broader scale and deeper R&D resources. Its polyurethanes and materials segments overlap with Huntsman, but BASF’s integrated supply chain and European stronghold give it cost and geographic advantages. Weaknesses include exposure to energy costs in Europe.
• Dow Inc. (DOW): Dow’s materials science segment competes in polyurethanes and epoxy markets. Dow’s larger production capacity and feedstock integration outpace Huntsman in commoditized products, but Huntsman’s focus on differentiated formulations offers niche strengths.
• LyondellBasell Industries (LYB): LyondellBasell excels in olefins and polyolefins, overlapping in intermediates like propylene oxide. Its cost-advantaged feedstock positions it well in commoditized chemicals, but Huntsman’s specialty focus provides higher margins in certain applications.
• Eastman Chemical Company (EMN): Eastman’s Advanced Materials segment rivals Huntsman in specialty resins and additives. Eastman’s innovation in sustainable materials (e.g., recycled plastics) is a strength, but Huntsman’s polyurethanes diversification is more comprehensive.
• Avient Corporation (AVNT): Avient competes in specialty polymer formulations and colorants. Its smaller scale limits pricing power, but targeted M&A in sustainable solutions poses a long-term competitive threat to Huntsman’s Advanced Materials segment.