Ashland (NYSE: ASH) has announced a $400m share buyback and bumped its dividend by 17%. It also announced that CEO James O'Brien will play a more limited role for 2-3 months due to health issues. Given its 6% FCF yield, operating leverage and strong balance sheet, Jefferies reiterates its Buy rating on Ashland with a $56 PT.

Ashland has announced a share buyback of $400m while raising its dividend 17%. The announced buyback is less than Ashland's 2011E-2012E FCF, or alternately represents slightly less than half of the proceeds from divesting Distribution.

Ashland also announced that Chairman and CEO James O'Brien will play a more limited role for the next 2-3 months due to a temporary health issue.

ASH is trading higher at $57.41