Ashland increase structural adhesives prices
On June 4, Ashland (ASH) stated that it would increase the prices of Isogrip and Pilogrip, its structural adhesive brands. These increases are expected to be effective on June 15, or as the contracts allow. The price hikes in these products are expected to impact the US, Canada, and Mexico. Below are the details of the price increases:
- The prices of Isogrip are expected to be increased by $0.10 per pound for all its variants.
- The prices of Pilogrip are expected to be increased by $0.14 per pound for all of its variants except 8500/8910B and 9100/91xx systems.
- ASH announced a 6.0% price increase for Pilogrip cartridges and cartridge-related products.
Ashland (ASH) noted that the increase in raw materials prices, as well as the packaging and transportation costs, were the primary reasons for these price hikes. Ashland has increased the prices of several other products, passing on the increase in raw material prices to its customers.
The latest price increases are expected to be more visible in ASH’s fiscal fourth quarter, which ends on September 30. In its fiscal second quarter, ASH reported sales of $974.0 million, an increase of 21.0% over the previous year. This price increase could help ASH’s revenues increase if its sales volumes don’t decline.
Stock price update
Ashland’s (ASH) stock price increased 2.3% and closed at an all-time high of $80.01 for the week ended June 8. As a result, the stock traded 10.3% above its 100-day moving average price of $72.57, which indicates an upward trend in the stock.
On a year-to-date basis, ASH stock has gained 12.4%, showing an upward trend. Analysts are bullish on the stock and increased its target price to $84.50, which implies a return potential of 5.6% from its June 8 closing price.
Ashland’s RSI (relative strength index) at 70, which suggests that the stock has temporarily moved into an “overbought” position. This trend could trigger some sell-off in the stock.
Ashland outperformed the Invesco Russell MidCap Pure Value ETF (PXMV), which rose 0.6% for the week. PXMV invests 1.7% of its portfolio in Ashland. The fund also provides exposure to TCF Financial (TCF), PacWest Bancorp (PACW), and CNA Financial (CNA), which have respective weights in PXMV of 1.6%, 1.3%, and 1.3% on June 8.