Ashland Downgraded To 'Neutral' On Stock Value

NEW YORK (AP) — Shares of chemical maker Ashland Inc. have gotten too expensive to justify a "Positive" rating, said an analyst Tuesday as he downgraded the stock to "Neutral."

Ashland shares on Monday fell 38 cents to $36.91 — but still exceeded Susquehanna analyst Stephen Velgot's $37 price target for the company. Shares of the company have more than tripled since the start of the year when the stock traded at $11.02.

Velgot said the company's Valvoline division continues to fuel the company's earnings performance, but warned that gross margins in the company's core specialty chemical business segments have reached a bottom, despite cost-cutting measures over the past several quarters.

Velgot expects Ashland to spin off, rather than sell, its Valvoline business — a move that could be a catalyst for Ashland shares, but not for another 6 to 9 months.