Avient (AVNT – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Sison from Wells Fargo remains neutral on the stock and has a $39.00 price target.
Michael Sison has given his Buy rating due to a combination of factors that project a positive outlook for Avient’s stock (AVNT). Despite disappointments in volume declines, Sison maintains his optimism due to the company’s steady growth in sustainable solutions and composites and recent stock weakness. He acknowledges a potential shift in the mid-24 period and has adjusted his price target to $39, down from $46. Sison has also revised his earnings per share (EPS) estimates, with a lowered projection of $0.47 for the fourth quarter of 2023, signifying a 13.2% increase.
Despite the lowering of some estimates, Sison still sees potential in AVNT’s growth. He notes that Avient’s new specialty portfolio, which includes sustainable solutions, composites, and healthcare, is expected to drive long-term growth. This portfolio comprises over 60% of total sales and is predicted to stimulate a 6% growth in the long term. Additionally, Sison emphasizes the positive impact of cost deflation tailwinds on AVNT’s EBITDA in 3Q23 and the potential similar benefits in 4Q. His 12-month price target of $39 is based on a 2024E EV/EBITDA of 10.0x, with an adjusted EBITDA outlook of $525MM, highlighting the attractive risk/reward ratio in both near and longer terms.
Sison covers the Basic Materials sector, focusing on stocks such as Eastman Chemical, LyondellBasell, and Albemarle. According to TipRanks, Sison has an average return of 7.4% and a 53.40% success rate on recommended stocks.
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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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