Cytec Beats On 4Q, Jefferies Raises PT To $65

Jefferies & Company has published a research report on Cytec CYT after the company reported 4Q EPS that came in significantly higher than estimates and consensus thank in part to increased leverage regarding its secular trends. In the report, Jefferies writes "Cytec's risk/reward profile appears attractive for investors focused on its leverage to secular trends (lighter aircraft, environmentally friendly coatings), structural improvement in its coatings business, and an expansion in manufacturing. Engineered Materials sales increased 15% (15% volume, 1% price, -1% F/X) led by improved demand from new programs in large commercial transport. Cytec expects 8% volume growth in 2011 on continued strong volume growth from commercial markets, partially offset by declining military sales (est. 30% of segment sales). Coating Resins sales increased 6% (0% volume, 9% price, -3% F/X). Operating profits fell 78% as YoY pricing of $29.6m lagged raw material inflation of $40.6m primarily due to accelerating prices for propylene and propylene derivatives, and prioritizing capacity utilization over price." Jefferies & Company maintains its Buy rating and has raised the price target from $59 to $65. Cytec closed Friday at $53.87.