Ahead Of The Bell: Olin Upgraded To "Neutral"

NEW YORK (AP) — Specialty chemical and ammunition maker Olin Corp. is positioned to gain from recent price increases in both chlorine and caustic soda, said an analyst Wednesday as he upgraded the shares.

UBS analyst Don Carson said he believes the third quarter is likely the trough in chloralkali earnings, leaving room for the company's earnings and share price to grow. He upgraded Olin to "Neutral" from "Sell."

The Clayton, Mo.-based company's chloralkali products segment makes chlorine, caustic soda, bleach products and other chemicals.

Carson raised his profit estimates for 2009 and 2010 to $1.15 per share and 75 cents per share, up from 85 cents per share and 50 cents per share, respectively. He held to his 2011 estimate of $1 per share. Analysts polled by Thomson Reuters forecast 2009, 2010 and 2011 earnings of 90 cents per share, 48 cents per share and 96 cents per share, respectively.

Carson said he doesn't expect conditions to bounce back to 2008 peak-like levels though.

"We remain concerned about the pace of economic recovery even though we are now factoring in greater industrial activity and a weaker dollar into our estimates," he said. "If real demand does not improve in the fourth quarter of 2009 or the first quarter of 2010, that would create another inventory bubble and potentially increase downside risk to our new 2010 and 2011 estimates."

In premarket trading, Olin shares advanced 64 cents, or 3.8 percent, to $17.63.