NEW YORK (TheStreet) -- Shares of Huntsman (HUN) - Get Huntsman Corporation Report were gaining 10.5% to $13.19 on Wednesday after the chemicals company announced it entered into a $100 million accelerated share repurchase agreement with Citibank (C).
Citibank will make an initial delivery of about 7.1 million shares of Huntsman stock based on the company's Tuesday closing price of $11.94 a share under the agreement. The final number of shares and their price will be determined by the chemical company's volume-weighted average stock price during the term of the agreement.
The accelerated share repurchase transaction is expected to close early in the first quarter of 2016.
Huntsman said the accelerated repurchase is part of its $150 million buyback plan, and that it will use the remaining $50 million to purchase shares in the open market.
The company reported its third quarter financial results on Tuesday, which could still be helping its stock.
About 6.1 million shares of Huntsman were traded by 3:25 p.m. Wednesday, above the company's average trading volume of about 4.8 million shares a day.
TheStreet Ratings team rates HUNTSMAN CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate HUNTSMAN CORP (HUN) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 194.00% to $147.00 million when compared to the same quarter last year. In addition, HUNTSMAN CORP has also vastly surpassed the industry average cash flow growth rate of -21.70%.
- HUNTSMAN CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, HUNTSMAN CORP increased its bottom line by earning $1.34 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($1.83 versus $1.34).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Chemicals industry and the overall market, HUNTSMAN CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 75.6% when compared to the same quarter one year ago, falling from $119.00 million to $29.00 million.
- You can view the full analysis from the report here: HUN