Orion S.A.| OEC | Long at $5.75Orion NYSE:OEC : Another chemicals company in the dumps, but is it justified - long-term?
Technical Analysis
Price fell through my "crash" simple moving average zone (green lines). The last time this happened the price moved down to my "major crash" zone (gray lines) and subsequently rallied to a 4x investment 1.5 years later. Not to say that same trajectory will happen, but this company (like all chemical companies) are historically cyclical. The price may continue to drop into the $3's in the near-term and complete the "major crash" touch, but a longer-term outlook is likely to generate positive returns... likely...
Growth
A bad 2025, but beyond that, projections show growth in earnings and revenue through 2027: www.tradingview.com
Fair Value and Health
Fair value: $8.30
Tangible Fair Value: $6.58
Company cut its 2025 guidance due to softer demand and shifted focus to free cash flow generation.
Debt-to-equity: 2.19x (high)
Action
While this is mostly a technical analysis play, there are so many opportunities right now with chemical companies. The tape beyond 2025 is likely to be positive and those who can stomach the near-term risks (i.e. $3's) may do well long-term. But there are better plays out there for the impatient.
Targets into 2028
$6.60 (+14.8%)
$9.00 (+56.5%)
Long