Huntsman's Target Valuation Multiple Should Be Higher, Says This Analyst

RBC Capital analyst Arun Viswanathan raised the price target for Huntsman Corp HUN to $43 (an upside of 45%) from $39 while maintaining the Outperform rating on the shares.
With the sale of its underperforming textile business, the analyst believes HUN's target valuation multiple should be higher.
The company recently entered into a definitive agreement to sell its Textile Effects division to Archroma, a portfolio company of SK Capital Partners, for $718 million. The transaction is expected to close in 1H23.
Viswanathan says that given the stock's weak reaction to this news, he believes investors continue to be worried about recession impacts on construction and MDI demand.
The analyst argues that HUN will enter this recession with more cash, and every 0.5x EBITDA adds ~$3-4 to the stock.
Price Action: HUN shares closed higher by 2.20% at $29.71 on Thursday.

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