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Why Analysts Are Positive on W.R. Grace

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Analysts’ consensus on W.R. Grace

In the past six months, the number of analysts covering W.R. Grace (GRA) has fallen from 14 to the present 11.

Among them, 82% of analysts have recommended “buys,” 18% have recommended “holds,” and none have recommended “sells” on the stock.

 

Analysts’ consensus indicates a target price of $83.00 for W.R. Grace, which implies a return potential of 25.0% over its closing price as of March 14, 2018. In the past three months, the stock’s consensus target price has fallen from $84.5 to its current target price of $83.0. However, analysts appear to be bullish on the stock.

GRA’s 4Q17 earnings beat analysts’ expectations. It reported adjusted EPS (earnings per share) of $0.98, a rise of 3% on a year-over-year basis, and its revenue rose 4% to $459.5 million in 4Q17. GRA expects its 2018 revenue to rise 8%–10% and its adjusted EPS to rise 9%–12% compared to 2017.

Further, the company’s investment in Kazakhstan and its new contract with Grupa Azoty to provide licensing for its UNIPOL PP process technology is expected to drive its growth. This explains why analysts are recommending “buys” or “holds” on GRA.

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Individual analysts’ recommendations

  • Credit Suisse (CS) rated GRA as an “outperform” and recommended a target price of $82 on the stock, implying a return potential of 23.5% over its closing price as of March 14, 2018.
  • Seaport Global Securities has rated GRA a “buy” with a target price of $82.00—a return potential of 23.5% on its closing price of $66.40 as of March 14, 2018.

Investors can indirectly hold W.R. Grace by investing in the Vanguard Small-Cap Value ETF (VBR), which has invested 0.3% of its portfolio in GRA. The fund also provides exposure to Danaher (DHR) and Chemours (CC) with weights of 0.9% and 0.6%, respectively, as of March 14, 2018.

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