Ashland Shares Jump On Street Optimism, Upgrade

ERNEST SCHEYDER

NEW YORK (AP) — Shares of Ashland Inc. jumped Wednesday as Wall Street became increasingly convinced the chemicals maker can rebound from the recession and as an analyst boosted his rating.

The stock rose $2.86, or 12.4 percent, to $25.90 in morning trading. Shares have traded between $5.35 and $58.58 in the past 52 weeks.

Investors had punished the company's stock after the $3.3 billion buyout of Hercules Inc. last November loaded Ashland's balance sheet with debt.

But last week the Covington, Ky.-based company — which owns the Valvoline brand of lubricants and oil-change shops — posted a fiscal second-quarter profit that easily beat Wall Street's expectations.

"Needless to say, we are impressed by Ashland's (second-quarter) results," Gabelli & Co. analyst Rob Felice said in a note to clients on Monday. "The results are even more impressive when compared to the terrible numbers being posted by peers across the space."

Felice boosted his rating on Ashland to "Buy" from "Hold" and increased his 2009 earnings expectation to $2.60 per share from $1.60.