Jefferies Raises Price Target on Ashland (ASH), Sees International Specialty Products Acquisition as Strategic Play

Jefferies is reiterating its Buy rating on shares of Ashland Inc. (NYSE: ASH) and is raising its price target from $75 to $79.

The firm believes that the company's plan to acquire International Specialty Products will be a strong play and should be immediately accretive to earnings. It notes that following the acquisition Ashland will have transformed from a 15% specialty, $0.6 billion EBITDA company to a 74% specialty, $1.1 billion EBITDA company by 2012.

The company will pay for the acquisition with its cash on hand while $2.9 billion of it will be financed. The firm forecasts that the acquisition will add $0.36 per share in earnings for 2012 and $0.76 in 2013.

Jefferies is raising its 2012 EPS estimate by $0.05 to $4.50 to account for the 1.2 million share repurchased since April, and comments that it wont factor in the acquisition until it is subject to closing.

For more ratings news on Ashland Inc. click here and for the rating history of Ashland Inc. click here.

Shares of Ashland Inc. closed at $68.34 yesterday.

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