Susquehanna Upgrades Ashland (ASH) to Positive; Certain Businesses Showing Improvements

October 29, 2009 9:49 AM EDT

Susquehanna upgrades Ashland Inc. (Nasdaq: ASH) from Neutral to Positive. Price target $45.

Susquehanna analyst says, "Ashland Incorporated's fiscal 4Q09 results were generally in-line with our expectations. Ashland reported adjusted EBITDA of $224 million in the quarter, $4 million below our estimate and $7 million below consensus, while revenue and adjusted EPS from continuing operations were slightly above both our estimate and consensus. Additionally, Ashland again generated more than $4.00 per share of free cash flow in the quarter and continued to pay down debt, which is now at management's short-term goal of $1.6 billion of gross debt. Importantly, management noted that demand appears to be showing some initial signs of growth in the company's end markets. While we believe the sell-off in ASH following the earnings release likely resulted from investors focusing either on the reduced operating margins at Ashland's Valvoline business or the lack of a definitive announcement on a potential separation of Valvoline, in our view these issues are comparatively less important than the improved performance at the company's Water Technologies and Aqualon businesses."

To see more analyst ratings on ASH Click Here.

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