Jefferies Downgrades Ashland; Cuts Outlook (ASH)

Jefferies Downgrades Ashland; Cuts Outlook (ASH)


Jefferies reported on Thursday that it has cut its rating on chemical company Ashland Inc. (ASH).

The firm has downgraded ASH from “Buy” to “Hold,” and has lowered the company’s price target from $104 to $97. This price target suggests a 9% upside from the stock’s current price of $88.47.

Analyst Laurence Alexander commented: “Investor confidence in the asset shuffling thesis may not withstand 2-3 more rounds of downward revisions to EPS and FCF forecasts for 2014E-2016E.”

“Pension headwinds, incentive comp, Valvoline marketing expenses, sluggish end markets: in our view, it all adds up, and makes further multiple expansion more difficult.”

Looking ahead, the firm has reduced estimates for the fourth quarter from $1.70 to $1.59 per share. For FY2013, earnings estimates have been lowered from $6.25 to $6.15 per share. FY2014 estimates have been cut from $7.45 to $6.75 per share.

Ashland shares were mostly flat during pre-market trading Thursday. The stock is up 10% YTD

The Bottom Line

Shares of Ashland Inc. (ASH) have a 1.54% yield based on Wednesday’s closing price of $88.47.

Ashland Inc. (ASH) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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