In a report published Friday, Bank of America analyst Aleksey V. Yefremov reiterated an Underperform rating and $21.00 price target on Olin Corporation (NYSE: OLN).
In the report, Bank of America noted, “On July 3, the FBI released monthly US instant criminal background checks statistics for the month of June. Although the background checks do not reflect actual gun or ammunition sales we view this data series as a good indicator of demand trends for small caliber ammunition sold by Olin’s Winchester unit. The June statistics showed a 1.6% y-y decline in background checks, the first year-over-year decline since April 2012. Background checks surged at the end of 2012, growing 50% y-y in December 2012, followed by 81% spike in January 2013. However, thereafter the year-over-year growth has been decelerating every consecutive month, slowing to 9% in May and most recently a decline in June. We view the trend in background checks as a sign of normalization in demand for small caliber ammunition, which is supportive of our Underperform rating on OLN shares.”
Olin Corporation closed on Wednesday at $23.99.
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Posted in: Analyst Color, Reiteration, Analyst Ratings