Chemours, Tronox And Westlake Will See Earnings Rebound In Chemical Sector Amid TiO2 Recovery And Margin Expansion: Analyst

Truist Securities analyst Peter Osterland initiated coverage on several chemicals stocks ahead of earnings release.

Chemours Company CC: The analyst initiated coverage with a Buy rating and a price forecast of $27. The analyst writes that the company is positioned to achieve strong earnings growth in 2025-2026.

Osterland sees margin expansion in its Opteon refrigerant franchise and a potential rebound in the underperforming TiO2 segment, where consensus estimates appear overly conservative.

Valuation upside exists as the new management team executes cost optimization strategies and focuses on higher-value product applications, adds the analyst.

Osterland estimates EBITDA of $775 million (in line), $1.004 billion (+8% vs. Street), and $1.188 billion (+11% vs. Street) for 2024, 2025, and 2026, respectively.

The analyst assumes ~6% average revenue growth in 2025-2026 (above the company's >5% target) and consolidated EBITDA margins reaching 18.3% by 2026 (vs. Street's 17.1%).

Tronox Holdings plc TROX: Osterland initiated coverage with a Buy rating and price forecast of $17. The analyst sees the company as one of the strongest players in the TiO2 industry, benefiting from its scale and strong vertical integration, which have helped sustain margins better than peers during the downturn.

With improving TiO2 market fundamentals and potential support from anti-dumping duties on Chinese exports, the analyst expects above-market volume growth and significant earnings upside as operating rates recover.

The analyst estimates EBITDA of $563 million (in line with Street), $694 million (+6% vs Street), and $802 million (+6% vs Street) in 2024, 2025, and 2026, respectively.

Minerals Technologies Inc. MTX: The analyst initiated coverage with a Buy rating and a price forecast of $103. Osterland writes that the company's unique mineral reserves, engineering expertise, and strong market positions create a competitive edge which is undervalued relative to peers.

The analyst expects sustainable mid-single-digit revenue growth driven by diverse opportunities, modest upside to consensus estimates for 2025-2026, and potential upward revision to the company’s medium-term operating margin target.

The analyst estimates EBITDA of $404 million (in line with Street), $440 million (+3% vs Street), and $471 million (+4% vs Street) for 2024, 2025, and 2026 respectively.

Westlake Corporation WLK: Osterland initiated coverage with a Buy rating and price forecast of $168. The analyst says that the company has built a vertically integrated market leader through its synergistic chemicals and building products strategy.

With a strong ~$3 billion cash balance, the company has flexibility for further HIP expansion via M&A or increased shareholder returns, adds the analyst.

Osterland estimates EBITDA of $2.377 billion (in line with Street), $2.677 billion (+5% vs Street), and $2.996 billion (+5% vs Street) in 2024, 2025, and 2026, respectively.

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