BMO Capital reiterated its Market Perform rating and retained a $25.00 price target on Olin (NYSE: OLN) in the wake of the chemical maker's fourth-quarter 2025 earnings report. The firm noted that its target sits beneath the InvestingPro Fair Value assessment, indicating the possibility that the stock is undervalued relative to that proprietary benchmark.
Olin's Q4 2025 results matched the company's own lowered expectations set in a prior preannouncement. The quarter was affected by several factors inside the company and in its markets, including internal de-stocking, weaker chlorine pricing in its electrochemical unit, unplanned turnarounds, and declines in commercial ammunition pricing and volumes.
According to InvestingPro data cited by BMO, seven analysts have trimmed their earnings forecasts for the upcoming period, reflecting the persistent nature of these challenges.
While some of the headwinds that hit Q4 are expected to be short-lived, and therefore could support a rebound in the near term, BMO points to Olin's own guidance for the first quarter of 2026 that implies a quarter-over-quarter decline. The bank attributes that expected decline to subdued macroeconomic conditions remaining in place, as well as higher feedstock and power costs that are pressuring margins.
Market performance over the past year has been weak: Olin's share price has fallen 27.99% over the trailing 12 months. The stock's current price-to-earnings ratio stands at 47.66, a figure BMO appears to consider when weighing valuation versus underlying earnings stability.
BMO analyst Bhavesh Lodaya highlighted encouraging elements in the company's financial profile, including robust free cash flow generation and progress on cost-cutting initiatives that are reportedly on track. However, the firm emphasized that a sustainable recovery in the stock will likely depend on a stabilization of Olin's base earnings.
On the company's reported results, Olin posted a fourth-quarter net loss of $0.75 per diluted share, wider than the consensus analyst expectation for a $0.61 loss. Revenue for the quarter was $1.67 billion, ahead of the $1.55 billion consensus estimate but noted as slightly below the $1.67 billion reported in the same quarter a year earlier. Adjusted EBITDA fell to $67.7 million in Q4, down from $193.4 million in the fourth quarter of the prior year, underlining the extent of margin pressure during the period.
Implications
For investors and market participants, the combination of elevated costs, weaker end-market pricing in certain product lines, and operational disruptions keeps the outlook uncertain in the near term. BMO's maintained Market Perform rating signals a cautious stance until Olin can demonstrate more consistent earnings momentum.
What remains clear - the company is generating cash and executing on cost reductions, but reported profitability metrics in Q4 point to significant cyclical and operational pressures that must be addressed before analysts and investors are likely to turn more bullish.