Olin Plunges 4.05% After Moody’s Downgrade, Industry Overcapacity Weigh on Outlook

Olin Corporation (OLN) shares fell to their lowest level since August 2025 on November 21, with an intraday decline of 2.12%. The stock has now dropped 4.05% over two trading days, extending a recent downturn that reflects growing investor concerns over the company’s financial health and industry outlook.

The selloff follows a negative outlook revision by Moody’s, which cited sustained weak earnings, deteriorating credit metrics, and industry-specific risks. Olin’s adjusted debt-to-EBITDA ratio stood at 4.7x as of September 30, 2025, well above its target of 2.0x. Retained cash flow-to-debt also fell below Moody’s 15% threshold, signaling strained liquidity and debt-servicing capacity. Analysts attribute the underperformance to prolonged weak demand in the chlor-alkali and vinyls sectors, as well as rising costs in ammunition and epoxy segments.

Broader industry challenges compound these pressures. Excess global capacity in chlor-alkali products and epoxy resins has depressed pricing and margins. OxyChem, a key Olin subsidiary, plans to expand its Texas facility, adding new capacity by late 2026. While the move aims to capitalize on long-term demand, it risks exacerbating near-term industry oversupply if the U.S. industrial economy fails to recover. Despite $140 million in cash and access to $1.2 billion in revolving credit, Olin’s liquidity buffers remain vulnerable to further earnings deterioration or elevated debt levels. The company’s conservative financial policies and $100 million in projected free cash flow may provide some relief, but execution on cost-cutting and operational efficiency will be critical to stabilizing its credit profile.