W.R. Grace’s price hike
On November 6, 2017, W.R. Grace (GRA) announced that it would be hiking the prices of its silica-based and molecular sieve products. GRA has declared a price increase of 6% on these products.
The price hike will be effective on January 1, 2018, as contracts allow. These products cater to paint, pharmaceutical, and many other industries.
The price impact will be seen in brands like Sylodent, Syloid, Daraclar, and many other brands. The impact of the price increase will be visible in 1Q18 and could help improve the Materials Technologies segment revenues, provided that volumes don’t decline. In 3Q17, this segment reported revenues of $112.0 million—a 3.0% YoY (year-over-year) rise.
Grace’s stock performance
Grace’s stock price fell 5.6% and closed at $71.11 in the week ended November 10. The decline in stock has caused a trend reversal in its 100-day moving average price. GRA was most recently trading 0.20% below its 100-day moving average price of $71.28.
On a YTD (year-to-date) basis, the stock has returned 3.5%, but analysts have projected a target price of $84.38 over the next 12 months, implying a return potential of 18.7% based on its the closing price on November 10. GRA’s RSI (relative strength index) score of 39 indicates that the stock is neither overbought nor oversold.
Notably, investors looking to hold GRA indirectly can invest in the iShares US Basic Materials ETF (IYM), which has 0.75% of its portfolio in W.R. Grace. The fund’s other holdings include Monsanto (MON), Praxair (PX), and Air Products and Chemicals (APD), which had weights of 7.7%, 6.3%, and 5.2%, respectively, as of November 10.