12 Best Basic Materials Stocks to Buy According to Analysts

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1) Olin Corporation (NYSE:OLN)

Average Upside Potential: 64.7%

Number of Hedge Fund Holders: 33

Olin Corporation (NYSE:OLN) is engaged in manufacturing and distributing chemical products. BofA Securities analysts upped the company’s stock from “Neutral” to “Buy”. The analysts opine that the company has the best FCF yield within their commodity coverage. Olin Corporation (NYSE:OLN) remains in a shielded position from the associated risks because of the limited exposure to China and significant operations in the US, which can gain from the expected lower taxes.

BofA Securities believes that the company’s EBITDA is expected to increase in 2025. This optimistic outlook is backed mainly by the expectation that Olin Corporation (NYSE:OLN) will not encounter the same severe hurricane-related disruptions it witnessed earlier. Furthermore, increased caustic soda prices and epoxy volumes, together with marginal improvement in demand, can contribute to Olin Corporation (NYSE:OLN)’s financial recovery. Moving forward, expected interest rate cuts in 2025 might help in the recovery in Building & Construction (B&C) sector, which can be particularly beneficial for the company.

Notably, Olin Corporation (NYSE:OLN) remains well-placed to capitalize on a recovery in industrial end-markets, considering robust operational leverage and strategic market positioning. Given its position as a global leader in the chlor-alkali sector, the company possesses the potential to witness strong earnings improvement as and when demand recovers.

While we acknowledge the potential of OLN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than OLN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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