On Wednesday, BMO (TSX:BMO) Capital Markets adjusted its price target on Ashland Inc . (NYSE:ASH) shares, increasing it slightly to $84.00 from the previous $83.00. The firm retained its Market Perform rating on the stock. Currently trading at $74.91, near its 52-week low, Ashland's stock shows potential upside according to InvestingPro Fair Value calculations. This adjustment comes following Ashland's recent investor day, where management presented both long-term growth prospects and near-term cost management strategies.
During the investor day, Ashland's management outlined their financial targets, aiming for $600 million in EBITDA by 2027, up from the current $445 million, which would represent approximately a 12% compound annual growth rate (CAGR). Additionally, they projected an earnings per share (EPS) CAGR of 18% over the same period.
These growth rates are notably higher than current estimates held by BMO Capital and the wider consensus, with InvestingPro data showing 4 analysts recently revising their earnings expectations downward.
The company's management expressed confidence in their ability to achieve these goals through a combination of cost-saving measures and growth initiatives. They believe that if Ashland can successfully execute on these plans, there could be a significant upside for the company's stock value.
In other recent news, Ashland Inc. has seen significant developments. The company reported a 1% rise in sales to $522 million, a 68% increase in adjusted EBITDA to $124 million, and a substantial 207% growth in adjusted EPS to $1.26 per share in the fourth quarter of fiscal year 2024.
However, analysts from Deutsche Bank (ETR:DBKGn) and BMO Capital have adjusted their outlook on Ashland's shares, reducing their price targets due to operational issues and weaker performance in the China coatings market. The company maintains a robust financial position with $300 million in cash and total liquidity of $896 million.
For fiscal 2025, Ashland is projecting adjusted EBITDA to range from $430 million to $470 million, and sales between $1.9 billion and $2.05 billion. The company also announced the departure of its Vice President, Finance and Principal Accounting Officer, Eric F. Boni.
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