The firm said it raised its rating on the global specialty chemical company as "the recent downfall in oil prices implies a flatter petrochemical cost curve, a downshift in energy infrastructure capex, and a margin tailwind for downstream chemicals."
Jefferies added that "tailwinds to Valvoline in the first half of 2015 should be followed by improved organic growth...as consumer demand benefits from a tailwind to disposable income."STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
The firm increased its price target on Ashland to $147 from $123.
Separately, TheStreet Ratings team rates ASHLAND INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASHLAND INC (ASH) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.92, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, ASH has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
- ASHLAND INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ASHLAND INC reported lower earnings of $0.90 versus $7.87 in the prior year. This year, the market expects an improvement in earnings ($7.45 versus $0.90).
- ASH, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues fell by 19.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 83.2% when compared to the same quarter one year ago, falling from $405.00 million to $68.00 million.
- You can view the full analysis from the report here: ASH Ratings Report