Jefferies Cuts Price Target on W.R. Grace & Co. (GRA); Reiterates Buy

October 27, 2016 10:02 AM EDT
Get Alerts GRA Hot Sheet
Price: $70.06 --0%

Rating Summary:
    9 Buy, 6 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 8 | New: 3
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Jefferies maintained a Buy rating on W.R. Grace & Co. (NYSE: GRA), and cut the price target to $80.00 (from $89.00), following the company's 3Q earnings report. Adjusted EPS of $0.80 was $0.04 above consensus. Elevated refinery inventory and weak specialist catalyst demand in China are likely headwinds into 2017, but the ramp of the Takreer plant and a 1%-2% improvement in catalyst price/mix should support the 11% EPS CAGR projected through 2020.

Analyst Laurence Alexander commented, "Q3 EPS of $0.80 beat consensus and our estimate by 0.04, yet the 2016 range remains pegged at $3.05-3.10. Takreer is ramping up, but refinery inventory and PO licensing revenue remain headwinds. The EPS bridge to 2017-2018 hinges on $20m in M&A synergies, modest pricing and a return to trend organic growth. 2016E FCF yield is 6%, which should translate into some EPS lift next year."

For an analyst ratings summary and ratings history on W.R. Grace & Co. click here. For more ratings news on W.R. Grace & Co. click here.

Shares of W.R. Grace & Co. closed at $66.02 yesterday.

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