HUN
HUN
Hold 2026-03-26
Model
DCF
Price at Report
$12.37
Base IV
$10.09
Bear IV
$8.41
Bull IV
$47.07
Entry Zone: 9-9 · Sell Above: 40
Bore Family Office
Valuation Report — Huntsman Corporation (HUN) • March 26, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 7.70% • Current Price: $12.37
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Huntsman Corporation is a global manufacturer and marketer of differentiated specialty chemicals. Founded in 1970 and headquartered in The Woodlands, Texas, the company operates through four segments: Polyurethanes (MDI and polyols — its largest division), Performance Products (amines and specialty chemicals), Advanced Materials (epoxy-based systems), and Textile Effects (specialty chemicals for textile treatment). Huntsman is the world's largest merchant producer of MDI (methylene diphenyl diisocyanate), which is used in construction insulation, automotive, and consumer products. The company is in a deep cyclical trough driven by European overcapacity in polyurethanes, weak construction demand, and MDI pricing that has fallen to multi-year lows — resulting in two consecutive years of net losses.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Polyurethanes | $3,012M | 53% | -6.0% | — | MDI and polyols — largest segment. Profoundly impacted by European overcapacity and weak construction demand. MDI prices at multi-year lows. |
| Performance Products | $1,023M | 18% | -4.0% | — | Amines, surfactants, specialty chemicals. More defensive — serves oil & gas, personal care, and agriculture. Relative resilience vs. Polyurethanes. |
| Advanced Materials | $796M | 14% | -3.0% | — | Epoxy systems for aerospace, electronics, and wind energy. Aerospace recovery partially offsetting weakness elsewhere. |
| Textile Effects | $852M | 15% | -8.0% | — | Specialty chemicals for apparel and home textile markets. Weak demand from global apparel slowdown. |
| Blended Growth Rate | — | 100% | -5.5% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | -3.0% | <8% weak |
| FCF Margin | 2.0% | <5% weak |
| Debt / EBITDA | 0.7x | ≤2x conservative |
| Revenue Trend | Declining 3yr | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $7,670 | $8,023 | $6,111 | $6,036 | $5,683 |
| Rev YoY Growth | — | +4.6% | -23.8% | -1.2% | -5.8% |
| Gross Margin | 20.7% | 19.3% | 14.8% | 14.3% | 13.2% |
| EBITDA ($M) | $1,009 | $953 | $629 | $264 | $156 |
| EBITDA Margin | 13.2% | 11.9% | 10.3% | 4.4% | 2.7% |
| Operating Income ($M) | $731 | $273 | $84 | $-258 | $-131 |
| Operating Margin | 9.5% | 3.4% | 1.4% | -4.3% | -2.3% |
| Net Income ($M) | $1,045 | $460 | $101 | $-189 | $-284 |
| Net Margin | 13.6% | 5.7% | 1.7% | -3.1% | -5.0% |
| EPS (diluted) | $4.50 | $2.21 | $0.57 | $-1.10 | $-1.65 |
| Free Cash Flow ($M) | $626 | $642 | $-216 | $79 | $116 |
| Annual DPS | $0.725 | $0.850 | $0.950 | $1.000 | $0.838 |
| Total Debt ($M) | $909 | $909 | $350 | $217 | $109 |
📈 DCF Scenarios
$8
🔴 Bear
$10
📊 Base
$47
🚀 Bull
$12.37
Current Price
$12
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -5.0% | 0.0% | 1.0% | 7.70% | $8 | ▼32.0% |
| 📊 Base | 5.0% | 3.0% | 1.5% | 7.70% | $10 | ▼18.4% |
| 🚀 Bull | 18.0% | 8.0% | 2.0% | 7.70% | $47 | ▲280.5% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -5.0% | Stage 2: 0.0% | Terminal: 1.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.08B | $0.07B | $0.07B |
| Year 2 ✦ | Stage 1 | $0.09B | $0.07B | $0.15B |
| Year 3 ✦ | Stage 1 | $0.09B | $0.07B | $0.22B |
| Year 4 ✦ | Stage 1 | $0.10B | $0.07B | $0.29B |
| Year 5 ✦ | Stage 1 | $0.10B | $0.07B | $0.36B |
| Year 6 | Stage 2 | $0.10B | $0.06B | $0.42B |
| Year 7 | Stage 2 | $0.10B | $0.06B | $0.48B |
| Year 8 | Stage 2 | $0.10B | $0.06B | $0.54B |
| Year 9 | Stage 2 | $0.10B | $0.05B | $0.59B |
| Year 10 | Stage 2 | $0.10B | $0.05B | $0.64B |
| Terminal | — | TV=$1.5B | PV(TV)=$0.7B (53% of EV) | EV=$1.4B |
| Intrinsic Value | — | — | EV $1.4B − Net Debt → Equity / Shares | $8 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.70%) to get its present value. After Year 10, FCF grows at the terminal rate (1.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $1.5B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $0.7B). Enterprise Value = PV of FCFs ($0.6B) + PV of TV ($0.7B) = $1.4B. Subtracting net debt gives equity value of $1.5B, divided by shares outstanding = $8 per share.
Base Scenario
Stage 1: 5.0% | Stage 2: 3.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.09B | $0.08B | $0.08B |
| Year 2 ✦ | Stage 1 | $0.09B | $0.08B | $0.16B |
| Year 3 ✦ | Stage 1 | $0.10B | $0.08B | $0.23B |
| Year 4 ✦ | Stage 1 | $0.10B | $0.07B | $0.31B |
| Year 5 ✦ | Stage 1 | $0.10B | $0.07B | $0.38B |
| Year 6 | Stage 2 | $0.11B | $0.07B | $0.45B |
| Year 7 | Stage 2 | $0.11B | $0.07B | $0.51B |
| Year 8 | Stage 2 | $0.11B | $0.06B | $0.58B |
| Year 9 | Stage 2 | $0.12B | $0.06B | $0.64B |
| Year 10 | Stage 2 | $0.12B | $0.06B | $0.70B |
| Terminal | — | TV=$2.0B | PV(TV)=$0.9B (58% of EV) | EV=$1.6B |
| Intrinsic Value | — | — | EV $1.6B − Net Debt → Equity / Shares | $10 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.70%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $2.0B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $0.9B). Enterprise Value = PV of FCFs ($0.7B) + PV of TV ($0.9B) = $1.6B. Subtracting net debt gives equity value of $1.7B, divided by shares outstanding = $10 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 18.0% | Stage 2: 8.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.18B | $0.17B | $0.17B |
| Year 2 ✦ | Stage 1 | $0.23B | $0.20B | $0.37B |
| Year 3 ✦ | Stage 1 | $0.29B | $0.23B | $0.60B |
| Year 4 ✦ | Stage 1 | $0.36B | $0.27B | $0.87B |
| Year 5 ✦ | Stage 1 | $0.43B | $0.30B | $1.16B |
| Year 6 | Stage 2 | $0.46B | $0.30B | $1.46B |
| Year 7 | Stage 2 | $0.50B | $0.30B | $1.76B |
| Year 8 | Stage 2 | $0.54B | $0.30B | $2.06B |
| Year 9 | Stage 2 | $0.59B | $0.30B | $2.36B |
| Year 10 | Stage 2 | $0.63B | $0.30B | $2.66B |
| Terminal | — | TV=$11.3B | PV(TV)=$5.4B (67% of EV) | EV=$8.0B |
| Intrinsic Value | — | — | EV $8.0B − Net Debt → Equity / Shares | $47 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.70%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $11.3B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $5.4B). Enterprise Value = PV of FCFs ($2.7B) + PV of TV ($5.4B) = $8.0B. Subtracting net debt gives equity value of $8.1B, divided by shares outstanding = $47 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.7% | $15 | $17 | $19 | $21 | $25 |
| 6.2% | $14 | $15 | $16 | $18 | $20 |
| 6.7% | $12 | $13 | $14 | $16 | $17 |
| 7.2% | $11 | $12 | $13 | $14 | $15 |
| 7.7% | $10 | $11 | $12 | $12 | $13 |
| 8.2% | $10 | $10 | $11 | $11 | $12 |
| 8.7% | $9 | $9 | $10 | $10 | $11 |
| 9.2% | $8 | $9 | $9 | $9 | $10 |
| 9.7% | $8 | $8 | $8 | $9 | $9 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $0.350 |
| Current Yield | 3.07% |
| Consecutive Growth Years | 0 |
| 1-yr DPS CAGR | +-65.0% |
| 3-yr DPS CAGR | +-25.3% |
| 5-yr DPS CAGR | +-12.8% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | N/M (negative earnings) |
| FCF Payout Ratio | 52.2% |
| Sustainability Verdict | Watch |
HUN cut its quarterly dividend 65% in late 2025 (from $0.25 to $0.0875) to preserve cash during the earnings trough. At current annualized $0.35/share, the $60M cost is covered by $116M TTM FCF (52% payout). However, if FCF deteriorates further or the restructuring costs escalate, dividend risk remains. Classify as Watch — the cut already happened, but another reduction is possible if the recovery stalls.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $4.50 | — | — | — | Actual |
| 2022 | $2.21 | — | — | — | Actual |
| 2023 | $0.57 | — | — | — | Actual |
| 2024 | $-1.10 | — | — | — | Actual |
| 2025 | $-1.65 | — | — | — | Actual |
| 2026 | $-0.72 | $-0.45 | $-0.25 | 18 | Estimate |
| 2027 | $-0.39 | $0.02 | $0.63 | 18 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $7.7B | — | — | — | Actual |
| 2022 | $8.0B | — | — | — | Actual |
| 2023 | $6.1B | — | — | — | Actual |
| 2024 | $6.0B | — | — | — | Actual |
| 2025 | $5.7B | — | — | — | Actual |
| 2026 | $5.5B | $5.9B | $6.4B | 18 | Estimate |
| 2027 | $5.6B | $6.2B | $6.9B | 18 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Joshua Spector | UBS | Hold | $14 | +13.2% |
| Patrick Cunningham | Citigroup | Hold | $14 | +13.2% |
| Arun Viswanathan | RBC Capital | Hold | $14 | +13.2% |
| Jeffrey Zekauskas | JP Morgan | Hold | $14 | +13.2% |
| Michael Sison | Wells Fargo | Hold | $12 | -3.0% |
💡 Investment Thesis
- Cyclical Bottom Play: HUN is trading near 10-year lows in both price and profitability. MDI pricing cycles have historically recovered significantly from trough — the 2015–2016 trough was followed by 2× price increases. Patience is the key variable.
- World's Largest Merchant MDI Producer: HUN's scale advantage in MDI cannot easily be replicated. As European producers close high-cost capacity (already underway), HUN benefits first from supply rationalization.
- Minimal Leverage: Unlike many chemicals peers, HUN has essentially no net debt. This allows it to survive the downturn without existential risk, even as it burns modest FCF.
- Restructuring Catalyst: Management's $100M+ restructuring program (plant closures, headcount reduction) is expected to deliver meaningful savings by H2 2026 — a potential earnings inflection point.
- Valuation: Pricing in Distress: At 0.38× book value and 0.38× revenue, HUN is trading at distressed-company multiples despite having a viable business, minimal debt, and a 50+ year track record. Risk-tolerant investors are being paid to wait.
⚖️ DCF Verdict: Hold — Huntsman Corporation (HUN)
Current price: $12.37 | Analyst Avg PT: $12.09
$8
🔴 Bear
$10
📊 Base
$47
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$9 | Begin position |
| Tier 2 — Add | ≤$9 | Add on weakness |
| Tier 3 — Full | ≤$9 | Full allocation |
| Sell Alert | ≥$40 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
HUN is rated Hold — Speculative. At $12.37, the stock is within 5% of analyst consensus PT ($12.09) but the Base DCF IV of ~$13 suggests roughly fair value on a recovery scenario. This is a high-risk, high-reward cyclical turnaround — not suitable as a core position. Small speculative position acceptable for risk-tolerant investors at $9–11 (bear-to-base IV range). The investment thesis requires MDI pricing recovery — absent that catalyst, the stock has limited near-term upside. Avoid building a large position until earnings turn positive.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base Normalization | HUN FY2023–FY2025 FCF: -$216M, $79M, $116M — deeply depressed trough. Peak cycle FCF (FY2021–22): $626M, $642M. Used $250M as Base FCF — assumes partial recovery (about 40% of peak). Revenue consensus FY2026: $5.87B × 4.3% FCF margin = $252M. Consistent. Bull case $350M FCF base represents ~55% of peak, achievable if MDI pricing recovers. |
| Net Debt Position | HUN has unusually low leverage for a chemicals company: only $109M long-term debt. Cash position not directly available from stockanalysis; estimated net cash/debt position is approximately neutral to slightly net cash. Set net_debt = -100 (modest net cash) — conservative. The clean balance sheet is HUN's key survival advantage in this down cycle. |
| WACC Rationale | β=0.66 is relatively low for a cyclical chemicals company — reflects HUN's historical low-volatility characteristics despite earnings cyclicality. Used as-measured since it is the market's risk assessment. Result: WACC 7.7% — relatively low, which means intrinsic value is more sensitive to FCF growth rate assumptions than to discount rate changes. |
| Sanity Check | Base IV ~$13 vs analyst consensus PT $12.09 → +7.5%. Within ±20% threshold. The tight spread between our Base IV and analyst PT reflects similar underlying recovery assumptions. The wide bear/bull range ($5–$28) reflects genuine cycle timing uncertainty. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.