RBC Capital has reduced its price target on Olin Corporation (NYSE: OLN) to $21.00 from $24.00, while keeping a Sector Perform rating on the shares. The move reflects what the firm describes as sustained weakness in several of Olin's operating areas.
In a note, RBC analyst Arun Viswanathan identified multiple contributors to a lower-than-expected first-quarter EBITDA. He flagged softness tied to chlorine markets that has impaired caustic production economics, ongoing Winchester destocking alongside cost inflation pressures, and weakness in the Epoxy business. Taken together, those factors drove the revision to near-term earnings expectations.
RBC does not foresee a material sequential improvement in Q2 2025, although it allows for limited upside should caustic pricing firm and seasonal chlorine demand pick up enough to benefit the Chlor Alkali Vinyls (CAV) segment. For the full year outlook, the firm adjusted its EBITDA forecasts downward and now projects adjusted EBITDA of $60 million for Q1, $550 million for fiscal 2026, and $750 million for fiscal 2027. Those numbers compare with prior estimates of $153 million for Q1, $760 million for FY26, and $940 million for FY27.
Despite trimming the price target and lowering near-term profit estimates, RBC increased the multiple it applies in its valuation to 9.5 times from 7.5 times, citing what it calls "the extended trough" in Olin's operating performance.
These analyst moves come after Olin reported a notable earnings miss for the fourth quarter of 2025. The company posted adjusted earnings per share of -$0.75, below the expected -$0.61, a negative surprise of 22.95 percent. Management reported $321 million in operating cash flow for the period and maintained $1 billion in liquidity. However, the company offered unfavorable guidance for the upcoming quarter, which has added to investor concern.
Following the earnings release, RBC and other analyst firms had not reported any new upgrades or downgrades. Market sentiment has been pressured by the combination of the EPS shortfall and the guarded outlook provided by the company.
Given these developments, investors and market participants will be watching near-term caustic pricing and seasonal chlorine demand, as well as inventory patterns in Winchester and cost inflation dynamics, for any signs of stabilization in Olin's results.