Ahead Of The Bell: Ashland Upgraded

HARTFORD, Conn. (AP) — Ashland Inc. will likely benefit from greater profitability at its Valvoline motor oil division, faster cost savings and earnings growth at its Hercules business, an analyst said Monday as he upgraded the chemical maker.

KeyBanc analyst Michael J. Sison increased the rating for the Covington, Ky., company to "Buy" from "Hold" and established a 12-month price target of $53.

In a client note, he cited "improved confidence that Valvoline can keep rolling on higher profitability, cost savings initiatives are ahead of schedule and the Hercules franchises have good room for earnings growth."

Last November, Ashland paid $2.4 billion for Hercules, which makes paper chemicals and specialty additives such as paint thickeners.

Sison also raised his 2010 earnings per share estimate to $3.25 per share from $2.40 per share. Analysts surveyed by Thomson Reuters expect Ashland to earn $3.06 per share for 2010.

The Valvoline lubricant business represents about half of Sison's earnings forecast for 2010.