Jefferies Reiterates Buy Rating on Ashland (ASH)

Jefferies & Company is out with a research report this morning, where it reiterates its Buy rating on Ashland ASH; it has a $68.00 price target on the stock. The Jefferies analysts said that they are lowering estimates on the name due to concerns about near-term margin pressure in Valvoline, which may balance recoveries in other segments. They also noted the company's robust operating leverage to a recover and solid free cash flow as reasons for maintaining the Buy rating. As for valuation, the analysts remarked, “Our 12-month price target of $68, at 6.7x FY11E EBITDA (based on our proforma balance sheet) and 16.8x EPS, is based on a 50/50 blend of our peak and mid-cycle valuation model for the company and the sector.”