Shares of specialty chemicals company Ashland Global Holdings Inc. (NYSE: ASH) were up 3.4% at the time of writing after the company announced preliminary results for the third quarter of Fiscal 2022 (ended June 30, 2022) and revised projections for Fiscal 2022 (ending September 2022).
Shares of the company closed at $98.75 on Friday.
Revenues Drive ASH’s Third-Quarter Preliminary Results
In the quarter, Ashland’s revenues were $644 million, up 19% from the year-ago quarter. Also, the top line surpassed the consensus estimate of $596 million. Solid demand in end markets, favorable product mix, and impressive pricing supported the company’s top-line growth, which was partially offset by a 5% adverse impact from forex woes.
On a segmental basis, the company’s sales grew in double-digits for Life Sciences, Personal Care, Specialty Additives, and Intermediates.
Adjusted earnings in the quarter are anticipated at $1.89 per share, higher than the consensus estimate of $1.43 per share. Free cash flow in the quarter is expected to lag the year-ago tally.
The company is slated to release its third-quarter results on July 27, 2022.
ASH’s Revised Projections Underpin Its Top-Line Strength
For Fiscal 2022, the company forecasts revenues to be within the $2.35-$2.40 billion range, up nearly 3% from the $2.25-$2.35 billion stated earlier.
Forex woes are expected to hurt revenues by $30 million in the fourth quarter.
The adjusted earnings before interest, tax, depreciation and amortization are forecast to be $580-$590 million versus $550-$570 million predicted earlier.
The company’s Chairman and CEO, Guillermo Novo, said, “We expect underlying near-term demand to remain strong and continue to take actions to build inventories to mitigate supply-chain and shipping challenges.”
Wall Street’s Take on Ashland Global
On TipRanks, Ashland has a Strong Buy consensus rating based on six Buys and one Hold. ASH’s average price target of $126 suggests 27.6% upside potential from the current level. Shares of the company have grown 16.9% over the past year.
Following the news, Michael Sison of Wells Fargo maintained a Hold rating on ASH while lowering the price target to $107 (8.35% upside potential) from $113.
The analyst believes that the company’s “more specialty, consumer facing end markets and strong balance sheet” make the stock “attractive in a potential recession.”
Bloggers Are Bullish on ASH Stock
According to TipRanks, financial bloggers are 100% Bullish on ASH, compared with the sector average of 72%.
Key Takeaways for ASH’s Investors
It is evident from the above-mentioned discussion that the top-line prospects are solid for Ashland on the back of solid demand in markets served, healthy pricing, and gains from product mix. However, forex woes and supply and shipping issues remain near-term concerns for the company.
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