Jefferies & Co. Meets With Cytec Management

Jefferies & Company has published a research report on Cytec Industries, Inc. CYT after meeting with company management. In the report, Jefferies writes "We recently hosted a meeting with Cytec CEO Shane Fleming and CFO Dave Drillock. Key topics included demand fundamentals (in line), competitive dynamics, and capital allocation. We remain comfortable with our 2010E forecast of $3.35 (vs. Cytec's range of $3.20-$3.50), but 2011E rises $0.05 to $3.75 and 2012E $0.20 to $4.30 to better reflect 1/ underlying fundamentals remain firm; 2/ our optimism that the pressure from Chinese competitors in some parts of the Coatings business will fade in 2011; 3/ volume recovery helping lift Coatings margins (10%-15% "free" capacity) and 4/ better aerospace composites margins as R&D/sales peaks (around 6%-7%). We believe our estimates remain conservative: e.g. only 25% incremental margins in Coatings, composites margins of 16.8% in 2012E vs. Cytec's target of 18%-20%." Jefferies maintains its Buy rating but has lowered the price target from $64 to $60. Cytec Industries closed yesterday at $48.23.