Jefferies Reiterates Buy on Ashland (ASH)

Jefferies is out with its report today on Ashland ASH, reiterating Buy. In a note to clients, Jefferies writes, "While near-term margin pressure may balance volume gains, we reiterate our Buy rating based on Ashland's significant operating leverage to a recovery and robust free cash flow. Raw material pressures continue to restrict margins, despite pricing actions in several segments. With pricing in Water and Valvoline likely to help by Q3 but raw materials pressures likely to rise further still persistent, we remain comfortable with our $3.55 EPS estimate for FY11 ($0.64 in Q2)." Jefferies has a $68 PT on ASH. At the time of posting, shares of ASH were trading at $58.33, down 0.39% from Tuesday's close.