David Huang CFA, an analyst from Deutsche Bank, maintained the Hold rating on Avient (AVNT – Research Report). The associated price target is $37.00.
David Huang CFA has given his Hold rating due to a combination of factors concerning Avient’s financial outlook. His decision to downgrade Avient’s shares from Buy to Hold is primarily based on the company’s anticipated challenging performance in 2024. The predicted EBITDA recovery is delayed by a year due to a weak macro environment, persistent de-stocking in certain markets, and peaked price/raw tailwinds. Moreover, the lack of positive catalysts in the upcoming six months suggests limited near-term upside for Avient shares.
Despite Avient’s strong pricing power and resilient Sustainable Solutions and Composite portfolios, the underlying demand remains below trend for approximately 80% of the overall portfolio. This includes sectors outside of defense, energy, and transportation. Huang also takes into consideration the impact of raw material cost deflation, which he believes has likely peaked in Q3/Q4. While the deflation was previously seen as a potential driver for strong margin expansions, it’s now perceived as a well-understood factor among investors. This perception, combined with other factors such as below trend volume growth and increased SG&A costs, contributes to his Hold rating for Avient.
According to TipRanks, Huang CFA is ranked #6151 out of 8489 analysts.
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Avient (AVNT) Company Description:
PolyOne Corp. engages in the business of thermoplastic compounds. It specializes in polymer materials, services, and solutions with operations in specialty polymer formulations, color and additive systems, plastic sheet and packaging solutions and polymer distribution. The firm is also involved in the development and manufacturing of performance enhancing additives, liquid colorants, fluoropolymers and silicone colorants. It operates through the following segments: Color, Additives and Inks; Specialty Engineered Materials; and Distribution. The Color, Additives and Inks segment provides custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, speciality inks, plasticols, and vinyl slush molding solutions. The Specialty Engineered Materials segment makes polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. The Distribution segment distributes engineering and commodity grade resins, including PolyOne-produced solutions, principally to the North American, Central American, and Asian markets. The firm’s products include polymer distribution, screen printing inks, and thermoplastic elastomers. Its services include IQ design and color services. The company was founded on August 31, 2000 and is headquartered in Avon Lake, OH.
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