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Why Do Analysts Favor Ashland?

Peter Neil - Author
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May 30 2018, Updated 12:35 p.m. ET

Analysts’ consensus on Ashland

Since the beginning of 2018, the number of analysts tracking Ashland (ASH) has increased from 11 to 12. Among them, 83% have recommended “buys,” 17% have recommended “holds,” and none have recommended “sells” on ASH.

Analysts’ consensus estimate on Ashland suggests a target price of $83.50, implying a return potential of 5.7% over its closing price of $79.02 on May 25. In the past three months, the stock’s consensus target price has increased from $80.10 to the current target, indicating that analysts are bullish on the stock.

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Ashland reported a strong fiscal second quarter. ASH’s revenue stood at $974 million, a rise of 21% over the previous year. ASH reported adjusted EPS of $1.06 compared to its guidance of $0.8–$0.90. ASH also announced a program that would save it $120 million via its Corporate and Specialty Ingredients segment’s selling, general, and administrative expenses. Further, ASH raised its adjusted EPS for its fiscal 2018 guidance to $3.30–$3.50 compared to its earlier guidance of $2.90–$3.10. All these positives have resulted in analysts having either “buys” or “holds” on ASH.

Individual brokerage views

  • BMO (BMO) raised its target price for ASH to $84, implying a return potential of 6.3% over its closing price of $79.02 on May 25.
  • Credit Suisse (CS) rated ASH as an “outperform” and recommended a target price of $86, implying a return potential of 8.8% over its closing price of $79.02 on May 25.
  • UBS (UBS) raised its target price for ASH to $84, implying a return potential of 6.3% over its closing price on May 25.

Investors looking for exposure to ASH can invest in the iShares Morningstar Small-Cap Value ETF (JKL), which invests 0.8% of its portfolio in Ashland.

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