Within the chemicals sector, we continue to prefer commodity-linked names that are best equipped to deliver robust FCF that can be redeployed to foster premium earnings growth. Despite superior relative performance over the past year, our analysis suggests that many commodity-linked and diversified chemical stocks remain inexpensive relative to specialty chemical peers. Among specialty producers therefore, we prefer some combination of company-specific catalysts and a valuation discount that suggests limited downside risk.

Top Picks:

  • Huntsman Corporation (HUN)
  • W.R. Grace & Co. (GRA)