UPDATE: JPMorgan Downgrades Ashland Inc. (ASH) to Underweight
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JPMorgan analyst Jeffrey Zekauskas downgraded Ashland Inc. (NYSE: ASH) from Neutral to Underweight with a price target of $89.00 (from $88.00).
The analyst comments "Ashland is becoming a pure play in Specialty Ingredients. Ashland separated Valvoline to become a more focused specialty chemical company in May 2017. Then, in 4Q:F19, Ashland completed the divestiture of its Composites business and its European butanediol facility in Germany to INEOS for ~$900m in net cash proceeds. The company is now in the process of acquiring personal care product lines of Schulke and Mayr GmbH for about 262.5m Euros or about $315m. We estimate Ashland’s free cash flow yield at about 3% for F2021 and 6% for F2022 at the current share price. We do not view this level of free cash flow generation to be remarkable relative to our chemical universe. Ashland’s businesses appear to be on a slower recovery trajectory than its chemical peers."
Shares of Ashland Inc. closed at $86.82 yesterday.
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