Oppenheimer Raising Price Target On Kronos Worldwide (KRO)

Oppenheimer & Co. is raising its price target on shares of Kronos Worldwide KRO to $57 from $52. In a note to clients, Oppenheimer writes, "A couple of quick updates on KRO: 1) on 2/3, a new price increase was announced for titanium dioxide sold outside North America and Europe for a minimum of $0.09/lb, effective 4/1; and 2) on 2/10, Kronos declared a $1/share special cash dividend payable on 2/28 to stockholders of record at the close of business on February 21." Oppenheimer goes on to say, "Now that we are no longer restricted on KRO, and with greater confidence on pricing, we increase our 2011E EPS by 7% to $3.72 and introduce 2012E of $4.55. Our estimates remain in flux with high sensitivity to incremental pricing. Our price target rises to $57/share from $52, applying a constant 15.0x 2011E P/E multiple (8.0x FV/EBITDA, 12.5x '12E P/E), plus $1 dividend. KRO is a pure-play in one of the strongest chemical markets, TiO 2, the no. 1 producer in Europe and no. 3 globally with 10% share. TiO2, a hard to substitute pigment imparting whiteness to paint and plastic, is soaring in price like other necessities due to a lack of reinvestment, demand, and inflation." Shares of KRO gained $1.28 in after-hours trading to $50.80, a gain of 2.58%.