Jefferies Reiterates Buy Rating on Ashland (ASH)

Jefferies 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, while near-term margin pressures in Valvoline are balancing recoveries in other segments, they are reiterating their Buy rating on the name as they believe ASH has significant operating leverage to a recovery and robust free cash flow. As for valuation, the analysts remarked, “Our $68 12-month price target, at 6.8x FY11E EBITDA (based on our proforma balance sheet) and 17.7x EPS, is based on a 50/50 blend of our peak and mid-cycle valuation model for the company and the sector.