President Trump is looking to place 25% tariffs on goods from Canada and Mexico and this could negatively influence US industries and critical sectors beyond just autos. According to a report by CNBC in January 2025 by Lori Ann LaRocco, Canada is the largest partner with the US for critical chemicals.
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The US chemicals industry also exports a huge amount of products to Canada. In 2023, US firms sold over $28 billion in chemicals to Canadian customers. On the other hand, Canadian partners export approximately $25 billion in chemicals to the US annually, as per the American Chemistry Council.
Texas, California, Louisiana, North Carolina, Illinois, Ohio, Indiana, New York, Pennsylvania, and Iowa are the top chemical-producing states and they account for about 66% of total US chemical production while the rest of the chemicals are imported. According to the American Chemical Council, Canada is the leading source of chemical imports to the US and accounted for 18.1% of the total chemical imports in 2023. Canada is followed by China and South Korea.
Eric Byer, CEO of the Alliance for Chemical Distribution, pointed out that if there is a trade war between Canada and the US, the price of critical chemicals could lead to inflationary pressures on US consumers and industries. According to Byer, Canada exports approximately 80% of the chlorine used in disinfecting drinking water for the West Coast states. He also pointed out that the US exports large amounts of phenol to Canada for use in the wood products industry. Some of that treated lumber is then also exported back into the US from Canada for domestic consumption and home construction purposes.
The US-Canada chemical trade relationship supports other industries as well and disruption of this trade between the two countries could have far-reaching consequences.
With this background in mind, let’s take a look at the 11 undervalued chemical stocks to buy now.
A close up view of a specialized chemical compound in the lab.
Our Methodology
To compile our list of the 11 undervalued chemical stocks to buy now, we looked for the largest chemical companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best chemical stocks. To find undervalued chemical stocks, we narrowed down our selection by looking for stocks trading at under 20 times their forward earnings as of March 28, 2025. Next, we focused on the top 11 undervalued chemical stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. Finally, the 11 undervalued chemical stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.
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11 Undervalued Chemical Stocks to Buy Now
11. Methanex Corporation (NASDAQ:MEOH)
Forward P/E: 8.05
Number of Hedge Fund Holders: 27
Methanex Corporation (NASDAQ:MEOH) is a Canadian chemical company that ranks among the best-undervalued chemical stocks to invest in. It is the largest methanol producer in the world and it supplies methanol to major international markets in North America, Asia Pacific, Europe, and South America. The company has production sites in Canada, Chile, Egypt, New Zealand, Trinidad and Tobago, and the United States. Methanex Corporation (NASDAQ:MEOH) has an extensive global supply chain of terminals, storage facilities, and the largest fleet of dedicated methanol ocean tankers in the world.
The company is making moves to strengthen its leadership in the methanol industry. In September 2024, Methanex Corporation (NASDAQ:MEOH) announced that it has entered into a definitive agreement to acquire OCI Global’s international methanol business for $2.05 billion. The deal includes OCI’s interest in two major methanol facilities in Beaumont, Texas. One of these facilities also produces ammonia. Methanex Corporation (NASDAQ:MEOH) will also acquire a low-carbon methanol production and marketing business and a currently idle methanol facility in the Netherlands. The two highly attractive methanol assets in Beaumont benefit from access to North America’s abundant and favourably-priced supply of natural gas feedstock. This transaction is expected to increase the company’s global methanol production by over 20%. Additionally, Methanex Corporation (NASDAQ:MEOH) expects to achieve approximately $30 million of annual cost synergies through reduced logistics costs and lower selling, general, and administrative expenses.
10. Green Plains Inc. (NASDAQ:GPRE)
Forward P/E: 9.52
Number of Hedge Fund Holders: 29
Green Plains Inc. (NASDAQ:GPRE) is an American chemical and biorefining company that specializes in the development and utilization of fermentation, agricultural, and biological technologies in the processing of annually renewable crops into value-added ingredients. The company is also one of the largest producers of ethanol in the US. It also produces high-protein ingredients for animal and aquaculture diets. Green Plains Inc. (NASDAQ:GPRE) ranks among the best chemical stocks to invest in.
The company is taking steps to optimize operations and reduce costs. In its Q4 2024 earnings call, Green Plains Inc.’s (NASDAQ:GPRE) management pointed out that they have identified $50 million in annualized cost savings and the company has executed on the first $30 million of improvements already. As part of this strategy, in January 2025, Green Plains Inc. (NASDAQ:GPRE) decided to shut down its Fairmont, Minnesota facility as it navigates challenging market conditions. On March 17, 2025, the company also announced that it has decided to temporarily idle its Clean Sugar Technology facility in Shenandoah, Iowa. This move is part of Green Plains Inc.’s (NASDAQ:GPRE) strategy to optimize its product mix to maximize returns. The company believes this presents an opportunity to further refine the dextrose production process while continuing to build significant commercial interest.
9. Westlake Corporation (NYSE:WLK)
Forward P/E: 15.60
Number of Hedge Fund Holders: 34
Westlake Corporation (NYSE:WLK) is a global diversified industrial company that manufactures and supplies chemicals, polymers, and building products for use in various consumer and industrial markets like housing and infrastructure, packaging, healthcare, automotive, and consumer goods. The company’s products and solutions are used in food packaging, medical devices, soaps and detergents, car interiors, fashion, toys, shoes, furniture, electronics, siding, stone veneer, windows, outdoor living, roofing, and pipe & fittings. Westlake Corporation (NYSE: WLK) ranks among the best chemical stocks to buy now.
On March 28, Truist Securities lowered its price target on Westlake Corporation (NYSE:WLK) from $166 to $155 and maintained a “Buy” rating. Analyst Peter Osterland revised estimates to reflect a “more conservative outlook” for the company’s performance in its Performance Materials (PEM) segment, especially in the first half of 2025. The more cautious outlook is partly driven by input cost pressure and outage-related expenses. Despite this change, the analyst remains positive about the company’s fundamentals and believes that the current stock price doesn’t fully reflect the company’s strengths. According to Osterland, these strengths of Westlake Corporation (NYSE:WLK) include its integrated portfolio, diversification into building products, and strong balance sheet.
8. Cabot Corporation (NYSE:CBT)
Forward P/E: 10.89
Number of Hedge Fund Holders: 35
Cabot Corporation (NYSE:CBT) is an American multinational specialty chemicals and performance materials company that provides a wide range of products and solutions, including reinforcing carbons, specialty carbons, battery materials, engineered elastomer composites, inkjet colorants, masterbatches and conductive compounds, fumed metal oxides, and aerogel. The company serves key industries like transportation, infrastructure, environment, and consumer. Cabot Corporation (NYSE:CBT) ranks among the best chemical stocks to invest in.
Over the past three years, the company has achieved significant milestones as part of its “Creating for Tomorrow” strategy, originally introduced at the Company’s 2021 Investor Day. Cabot Corporation (NYSE:CBT) achieved its ambitious 3-year corporate targets and delivered the top end of its Adjusted EPS CAGR target range of 8-12% and surpassed its 3-year cumulative Discretionary Free Cash Flow Generation (DFCF) target of over $1 billion, with $1.2 billion of DFCF over the 3-year period. In December 2024, Cabot Corporation (NYSE:CBT) announced its new financial targets for the next 3 years. These include an adjusted EPS CAGR of 7-10% from fiscal 2024 through fiscal 2027 and an adjusted EBITDA of $0.9-$1.0 billion by fiscal year 2027. The company continues to execute its strategy and invest in high-growth vectors, such as battery materials with new capacity to meet growth in customer demand. Cabot Corporation (NYSE:CBT) is also advancing its core business segments, Reinforcement Materials and Performance Chemicals, through innovation and strategic growth investments.
7. Celanese Corporation (NYSE:CE)
Forward P/E: 9.19
Number of Hedge Fund Holders: 35
Celanese Corporation (NYSE:CE) is a global chemical and specialty materials company that ranks among the best chemical stocks to invest in. The company engineers and manufactures a wide variety of chemical products and specialty material solutions used across a wide range of industries including aerospace, automotive and transportation, building and construction, consumer goods, electronics, food and beverage, industrial and manufacturing, and personal care markets. Celanese Corporation (NYSE:CE) ranks among the top chemical stocks to buy.
On February 24, BofA Securities lowered its price target on Celanese Corporation (NYSE:CE) to $72 from $88 and maintained a “Buy” rating. This decision came after a series of disappointing earnings reports and forecasts from the company, which led analysts to lower their earnings expectations and price targets for Celanese Corporation (NYSE:CE). Despite this, BofA analysts remain optimistic about the company’s future and suggest that Q4 2024 and Q1 2025 could mark the lowest point in the company’s earnings. The analysts expect EBITDA to improve after this period, although it is expected to stay below the levels seen in 2023-24. BofA’s analysis suggests that while margins for China’s acetyl products could stay low, they are not expected to further fall. The global construction industry is facing difficulties but analysts believe it is more likely to grow than further decline. Auto production is projected to stay steady with potential for growth in the coming years, especially in the US. Celanese Corporation (NYSE:CE) is also taking steps to expand into the electric vehicle (EV) market. Additionally, the company has implemented cost-saving measures that have been effective. BofA expects Celanese Corporation (NYSE:CE) to announce additional measures soon.
6. PPG Industries, Inc. (NYSE:PPG)
Forward P/E: 13.64
Number of Hedge Fund Holders: 36
PPG Industries, Inc. (NYSE:PPG) is an American multinational chemical company and a leading global supplier of paints, coatings, and specialty materials. With operations in more than 70 countries, the company serves customers in construction, consumer products, industrial, and transportation markets and aftermarkets. PPG Industries, Inc. (NYSE:PPG) ranks among the best-undervalued chemical stocks to invest in.
The company is strategically streamlining and optimizing its business by divesting some of its assets while also investing in growth initiatives in certain markets. In 2024, PPG Industries, Inc. (NYSE:PPG) optimized its business portfolio through the divestitures of its silica products and its architectural coatings US and Canada businesses. These divestitures improved the company’s financial profile and helped the company to improve its EBITDA margin to 18.1%. This move also helps PPG Industries, Inc. (NYSE:PPG) to focus more on core strengths and deliver sustainable organic growth. On March 26, 2025, PPG Industries, Inc. (NYSE:PPG) announced the opening of a new waterborne automotive coatings manufacturing plant in Samut Prakan, Thailand. The facility will produce waterborne basecoats and primers with a production capacity of 2,000 tons annually. The facility includes an automated spray application center that will enhance PPG Industries, Inc.’s (NYSE:PPG) service capabilities. The rise of electric vehicles in the region presents vast opportunities for global automakers, including Chinese OEMs. This move will expand the company’s operations and help the company meet the rising demand for coatings from automotive companies in Southeast Asia.
5. Eastman Chemical Company (NYSE:EMN)
Forward P/E: 10.31
Number of Hedge Fund Holders: 37
Eastman Chemical Company (NYSE:EMN) is an American multinational chemical and specialty materials company that produces a broad range of advanced materials, chemicals, fibers, and additives and functional products for everyday items. Addressing the needs of customers in more than 100 countries, the company serves attractive end markets such as transportation, building and construction, health and wellness, and consumables. Eastman Chemical Company (NYSE:EMN) ranks among the best chemical stocks to invest in.
The company is focusing on driving growth and financial performance through circular economy initiatives. In Q4 2024, Eastman Chemical Company (NYSE:EMN) continued to operate the Kingsport methanolysis facility, setting it up to deliver strong earnings growth in 2025. The company is investing in growth initiatives and launched the world’s largest molecular recycling facility to advance its leadership position in the circular economy. During the quarter, Eastman Chemical Company (NYSE:EMN) also made progress in building its Renew sales funnel. Through these initiatives, the company expects substantial EBITDA growth and projects that it will generate over $2.1 billion of EBITDA and approximately $1.6 billion of cash from operations in a stable economic environment before the benefit of circular investments. Eastman Chemical Company (NYSE:EMN) expects to see an additional EBITDA of $500 million by 2029. This will include $350 million of EBITDA from methanolysis projects in Kingsport, Tennessee and Longview, Texas, as well as $150 to $200 million of EBITDA from its cellulosic biopolymer platform. In 2025, Eastman Chemical Company (NYSE:EMN) expects that the Kingsport methanolysis facility will generate an incremental $75 to $100 million of EBITDA contribution compared to 2024.
To achieve these targets from its circular initiatives, the company will continue to invest in organic growth. Eastman Chemical Company (NYSE:EMN) expects capital expenditures of around $800 million in 2025 and between $800 million and $1 billion in 2026 and 2027.
4. Olin Corporation (NYSE:OLN)
Forward P/E: 15.87
Number of Hedge Fund Holders: 38
Olin Corporation (NYSE:OLN) is an American chemical and ammunition company that ranks among the best chemical stocks to buy. The company’s chemical products include chlorine and caustic soda, vinyls, epoxies, chlorinated organics, bleach, hydrogen, and hydrochloric acid. Through the Winchester brand, it also offers sporting and law enforcement ammunition, reloading components, small caliber military ammunition and components, industrial cartridges, and clay targets. Olin Corporation (NYSE:OLN) serves customers in approximately 100 countries around the world.
On March 27, Citi adjusted its price target on Olin Corporation (NYSE:OLN) and lowered it from $34 to $30 while maintaining a “Buy” rating. This decision came after a detailed investor lunch with the company’s top management, including CEO Ken Lane, CFO Todd Slater, and Director of IR Steve Keenan, where they discussed the company’s market position and outlook. Olin Corporation’s (NYSE:OLN) management noted that the chlor-alkali industry has largely reached a bottom while Electrochemical Unit (ECU) values have remained stable for six quarters despite weakness in end markets. Caustic soda prices have also shown stability recently but the management acknowledged potential oversupply concerns from new capacity additions in the industry. To provide an update on near-term performance, Olin Corporation’s (NYSE:OLN) top management confirmed that Q1 2025 performance is progressing in line with expectations. However, they cautioned that antidumping duty rulings on epoxy are not fully resolving supply/demand challenges in the market and current pricing issues as prices can’t seem to rise above increasing feedstock costs.
3. Dow Inc. (NYSE:DOW)
Forward P/E: 17.18
Number of Hedge Fund Holders: 48
Dow Inc. (NYSE:DOW) is an American multinational chemical and materials science company. It is one of the world’s leading suppliers of chemicals and plastics. The company has manufacturing sites in 30 countries and serves customers in high-growth markets such as packaging, infrastructure, mobility, and consumer applications. Dow Inc. (NYSE:DOW) ranks among the best chemical stocks to buy.
The company is currently shifting its focus on maintaining long-term competitiveness as it navigates through the ongoing slower-than-expected macroeconomic recovery. On January 30, Dow Inc. (NYSE:DOW) announced plans to achieve $1 billion in cost savings on an annual run-rate basis. Through targeted actions, the company will cut direct expenses by $500 million to $700 million, primarily focusing on purchased services and third-party contract labor. Additionally, Dow Inc. (NYSE:DOW) will decrease labor costs through a workforce reduction of about 1,500 positions globally. These initiatives will align spending with the current economic situation and improve Dow Inc.’s (NYSE:DOW) financial position.
2. Axalta Coating Systems Ltd. (NYSE:AXTA)
Forward P/E: 12.89
Number of Hedge Fund Holders: 49
Axalta Coating Systems Ltd. (NYSE:AXTA) is an American specialty chemicals and materials company that provides coatings for light vehicles, commercial vehicles, refinish applications, building facades, and other industrial applications. With its coating solutions, application systems, and technology, the company serves customers belonging to various industries in more than 140 countries around the world. Axalta Coating Systems Ltd. (NYSE:AXTA) ranks among the best chemical stocks to invest in.
The company reported record Q4 net sales of $1.3 billion in Q4 2024 and record full-year net sales of $5.3 billion in 2024. This performance was partly driven by strategic investments that Axalta Coating Systems Ltd. (NYSE:AXTA) made to grow its Refinish business. In July 2024, Axalta Coating Systems Ltd. (NYSE:AXTA) announced the completion of its acquisition of the CoverFlexx group, which specializes in coatings for automotive refinish and aftermarket applications for economy customers in North America. This acquisition enhanced the company’s product offerings in Refinish coatings by adding a range of primers, basecoats, clearcoats, aerosols, fillers, bed liners, detailing products, and paint shop accessories. Axalta Coating Systems Ltd. (NYSE:AXTA) is now better positioned to serve the economy segment with excellent offerings.
1. DuPont de Nemours, Inc. (NYSE:DD)
Forward P/E: 16.89
Number of Hedge Fund Holders: 58
DuPont de Nemours, Inc. (NYSE:DD), or simply DuPont, is an American multinational chemical and materials company. It provides technology-based materials and solutions to various markets including electronics, transportation, construction, water, healthcare, and worker safety. DuPont de Nemours, Inc. (NYSE:DD) ranks among the best chemical stocks to invest in.
On February 13, Barclays analyst Duffy Fischer upgraded the rating on DuPont de Nemours, Inc. (NYSE:DD) from “Underweight” to “Equal-Weight” and raised the price target to $89 from $85. Fischer suggested that the company is uniquely positioned as electronic chemicals is a segment that is experiencing genuine growth, driven by both secular trends such as data centers and AI, as well as cyclical factors like the rebound in printed circuit board (PCB) and smartphone industries. The rising investments in AI further support the view that the momentum in electronic chemicals will persist. The analyst also noted that electronic chemicals, unlike other AI-related sectors such as utilities or multi-industrials, have not experienced excessive valuation multiple expansions. This indicates that the electronic chemicals segment might be less likely to experience valuation contraction from market fluctuations, unlike other sectors that were affected by recent events like the “DeepSeek impact”.
Overall, DD ranks first among the 11 undervalued chemical stocks to buy now. While we acknowledge the potential of chemical companies, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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