Analysts at Morningstar are optimistic about a potential turnaround for the explosives business of Incitec Pivot (ASX:IPL), which could boost investor sentiment in the near future.

The brokerage has retained a fair value estimate of A$3.50/share for the diversified chemicals company.

It is projected that the earnings of Incitec Pivot (ASX:IPL)’s explosive division’s earnings before interest, tax, depreciation, and amortization (EBITDA) will return to pre-COVID levels by fiscal 2024.

This anticipated turnaround is attributed to a strong increase in price and growth demand.

The sound balance sheet of Incitec Pivot (ASX:IPL) could also potentially allow for special dividends, buybacks or acquisitions.

Regarding IPL stock ratings, 4 of 10 analysts rate it as ‘buy’ or higher, 5 rate it as ‘hold’ and 1 rates it as ‘sell’ or lower, according to LSEG data.

IPL stock has seen a decrease of 19.7% this year, up to the last close.

Incitec Pivot is a diversified chemical company specializing in manufacturing explosives and fertilizers.