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Ashland (ASH) to Hike Price of Selective Products in Americas

Ashland Global Holdings Inc. ASH will increase prices of 1-4 butanediol (BDO) and several derivative products in the Americas. The price hike will be effective from Apr 1, 2018 or as contracts permit.
The company will raise the price of 1-4 butanediol (BDO) by 10 cents per pound or 22 cents per kg. Prices of BLO butylrolactone, n-methyl-pyrrolidone, tetrahydrofuran, n-hydroxyethyl-2-pyrrolidone, n-ethyl-2-pyrrolidone, 2-pyrrolidone, n-cyclohexyl-2-pyrrolidone and specialty solvents will increase by 15 cents per pound or 33 cents per kg, each.
Ashland is taking appropriate pricing actions in response to raw material cost inflation. The latest move follows a series of price increases announced last month.
Shares of Ashland have moved up 13.7% over the past six months, significantly outperforming the industry’s 0.1% upside.
Ashland missed earnings and sales estimates in first-quarter fiscal 2018 (ended Dec 31, 2017). In the quarter, the company’s adjusted earnings came in at 46 cents per share, trailing the Zacks Consensus Estimate of 47 cents.
Revenues increased roughly 19.6% year over year to $842 million. The figure, however, lagged the Zacks Consensus Estimate of $860 million.
For fiscal 2018, Ashland updated its adjusted earnings outlook to a range of $2.90-$3.10 per share owing to changes in the company’s effective tax rate. Also, the company raised its effective tax rate expectation for the fiscal as a result of the recently enacted tax reform. This, in turn, is expected to reduce fiscal 2018 adjusted earnings by roughly 30 cents per share.
For second-quarter fiscal 2018, Ashland projects adjusted earnings in the range of 80-90 cents per share compared with 70 cents in the prior-year period. The company expects the benefit of its pricing actions to be partly offset, in the fiscal second quarter, by the impact of the planned maintenance shutdown in the Marl, Germany, facility.
Ashland Global Holdings Inc. Price and Consensus

Zacks Rank & Key Picks

Ashland has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the chemical space are LyondellBasell Industries N.V. LYB, Arkema S.A. ARKAY and Methanex Corporation MEOH.
LyondellBasell has an expected long-term earnings growth rate of 9% and sports a Zacks Rank #1 (Strong Buy). The company’s shares have moved up 22.2% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arkema has an expected long-term earnings growth rate of 8% and flaunts a Zacks Rank #1. The company’s shares have moved up 41.6% in a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2 (Buy). Its shares have gained 16.3% over a year.
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