JP Morgan analyst Jeffrey J. Zekauskas downgraded Orion S.A. (NYSE:OEC) from Overweight to Neutral and revised the price forecast from $18 to $12.

The analyst writes that he views Orion as fairly valued, trading at an estimated EV/EBITDA multiple of 5.2x for 2025 and 4.6x for 2026. However, ongoing economic uncertainty adds an element of valuation risk

Cabot, Orion's peer, currently trades at a 1.3x EBITDA multiple premium compared to Orion, adds the analyst.

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Zekauskas views this valuation gap as being within a normal range, suggesting limited room for further multiple expansion for Orion.

The analyst's earnings outlook remains unchanged and expects some stabilization in Orion's rubber black segment in 2025 following two years of declines, along with a volume recovery in the specialty carbon black business.

The analyst projects free cash flow yield to reach 15% in 2026, driven by significantly reduced capital expenditures following the conclusion of a La Porte expansion project.

The company plans to release the first quarter 2025 results on May 7, 2025.

Price Action: OEC shares are down 0.29% at $12.20 at the last check on Thursday.

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This article Orion Stock Has Limited Upside Amid Uncertain Economic Backdrop: JP Morgan originally appeared on Benzinga.com

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