Goldman Sachs Says Sell Nalco Holding Company

Goldman Sachs is downgrading shares of Nalco Holding Company NLC to Sell with a $28 price target on shares. In a note to clients, Goldman writes, "We downgrade Nalco (NLC) to Sell from Neutral as, with just 2% upside to our revised price target, we see better risk/reward profiles for other stocks in our coverage. We believe NLC will be challenged by the need to recover escalating petrochemical costs while also embarking on an emerging markets growth strategy that requires infrastructure spending. Thus, we only expect limited EPS growth in 2011, making NLC's premium valuation to the group less compelling. We would need to see a more attractive valuation, demonstrated success in recovering raw materials inflation, or more profitable emerging markets growth to become more bullish." Shares of NLC lost 14 cents yesterday to close at $27.04, a loss of 0.5%.