Hydrogen tax credit sale puts Olin’s St. Gabriel partnership in focus
Plug Power’s sale of a federal investment tax credit tied to the jointly operated St. Gabriel hydrogen liquefaction facility puts fresh attention on Olin (OLN) and its role in this large industrial project.
See our latest analysis for Olin.
At a share price of $24.93, Olin’s 1 day share price return fell 3.22% and its 30 day share price return is down 13.17%. The year to date share price return of 15.68% sits against a 1 year total shareholder return of 28.67% and a 3 year total shareholder return that has declined 48.03%, suggesting recent momentum has picked up from a weaker longer term record.
If the hydrogen story has your attention, it can be useful to widen the lens and see how other power and grid related businesses are trading via our 33 power grid technology and infrastructure stocks
With Olin trading at $24.93 alongside a reported intrinsic discount and room to the average analyst target of $29.00, the key question is whether recent weakness offers value or whether the market already reflects future growth.
Most Popular Narrative: 5.2% Undervalued
Against the last close of $24.93, the most followed narrative puts Olin’s fair value at $26.29, and ties that gap to a specific improvement plan.
Structural cost reduction initiatives (Beyond250 and Epoxy cost optimization) are expected to deliver significant operational savings, yielding an estimated $70 to $90 million run-rate benefit by the end of 2025 and additional structural cost reductions from the Stade, Germany facility in 2026; this should improve net margins and boost earnings quality.
Want to see what this cost reset really implies for future margins, earnings and valuation multiples over time? The narrative leans on tight financial assumptions that may surprise you when viewed against today’s loss making base.
Result: Fair Value of $26.29 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this narrative can quickly be challenged if prolonged global overcapacity continues to pressure chlor alkali margins or if Winchester’s ammunition profitability remains under strain.
Find out about the key risks to this Olin narrative.
Next Steps
With sentiment clearly mixed around Olin’s risks and rewards, this is a moment to move quickly, review the underlying data, and pressure test the thesis against the 3 key rewards and 2 important warning signs
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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