Summary: Goldman Sachs reiterated a Neutral rating and a $22.00 price target on Olin (NYSE:OLN). The company is forecasting a challenging first quarter with EBITDA well below the prior quarter and materially under consensus, driven by higher turnaround costs and weak market dynamics in key segments. Management’s Beyond250 restructuring is expected to deliver significant cost savings in 2026, helping offset thin gross margins and ongoing demand issues.
Goldman Sachs kept its Neutral stance on Olin and reaffirmed a $22.00 price target, citing a difficult operating backdrop in the opening quarter. Olin shares trade at $22.17 and the company carries a market capitalization of $2.52 billion. The stock has lost nearly 12% over the last week.
Company guidance shows Q1 2026 EBITDA is expected to come in below the previous quarter’s $68 million and substantially under the consensus estimate near $144 million. Management attributes part of the shortfall to roughly $40 million of additional turnaround expense versus the year-ago quarter, a headwind that compounds already strained profitability.
On a trailing-twelve-month basis, Olin is not profitable, with LTM EBITDA of $655.9 million and analysts projecting a decline in net income for the year. The group’s gross profit margin sits at a slim 7.4%, although free cash flow yield is a stronger 10%, and the company reports $1 billion in available liquidity alongside $321 million of operating cash flow generation.
Management is leaning on its Beyond250 initiative to restore structural earnings. The plan is targeted to produce $100-120 million of cost savings in 2026, with $40-50 million of those savings allocated to the Epoxy segment. Olin expects the Epoxy business to return to profitability in 2026 even in the absence of market improvement, a crucial internal offset given ongoing weakness elsewhere.
Segment-level dynamics remain mixed. In the Chlor Alkali Vinyls business, management anticipates continued pressure on global vinyls pricing. By contrast, it sees improving supply-demand conditions in caustic soda. First quarter caustic volumes are forecast to be slightly lower due to constrained supply, a factor that could support caustic prices if demand holds.
The Chlor Alkali Vinyls segment is a material contributor to overall sales; Olin reported total revenue of $6.78 billion, a rise of 3.68% over the last twelve months. Still, the pricing environment for vinyls and the volume mix are weighing on profitability.
Olin’s Winchester ammunition unit is implementing commercial price increases in the first quarter to counter higher raw material costs. Management also indicated that further increases may be necessary if copper prices remain elevated, signaling sensitivity of margins to commodity inputs in that business.
Despite the operational and demand challenges, Olin has preserved its dividend for 52 consecutive years and currently yields 3.84%.
Recent results and analyst reactions
Olin posted a notable miss in fourth-quarter 2025 earnings, delivering EPS of -$0.75 versus forecasts of -$0.61, and provided unfavorable guidance for the upcoming quarter. Following the results and the outlook, several brokerage firms adjusted their price targets. Truist Securities lowered its target to $20, pointing to ongoing pressure in core earnings, particularly within the Chlor Alkali Products and Vinyls segment. KeyBanc Capital Markets cut its target to $26, describing Olin’s start to 2026 as "disappointingly low" in earnings for the CAPV segment. RBC Capital trimmed its target to $21 and cited weaknesses across multiple segments, including chlorine and epoxy production.
Implications for investors and markets
From a financial perspective, Olin is balancing thin gross margins with comparatively robust free cash flow yield and a sizable liquidity buffer. Cost reduction under the Beyond250 plan and price actions in ammunition provide management levers to support margins, but continued weakness in vinyls pricing and higher turnaround expenses are likely to pressure near-term results.
Key points:
- Goldman Sachs reaffirmed a Neutral rating and $22.00 price target on Olin as the company faces a difficult Q1.
- Olin is expecting Q1 EBITDA below the prior quarter’s $68 million and far under consensus near $144 million, hit by approximately $40 million of extra turnaround costs.
- Beyond250 cost savings of $100-120 million in 2026, including $40-50 million for Epoxy, are central to management’s plan to restore profitability; the company also maintains $1 billion in liquidity and a 10% free cash flow yield.
Risks and uncertainties:
- Persistently weak global vinyls pricing could continue to depress margins in the Chlor Alkali Vinyls segment, affecting revenue and earnings.
- Higher-than-expected turnaround expenses and ongoing elevated raw material costs, including copper, could lead to further earnings pressure and possible additional price actions in ammunition.
- Analyst downgrades and lowered price targets following the Q4 2025 EPS miss and soft guidance may keep investor sentiment muted until operational improvements are visible.
Investors will be watching actual first-quarter results, execution on the Beyond250 plan and commodity-driven pricing dynamics to assess whether the structural savings and price actions can offset the current headwinds.