Jefferies Talks Chemical Stocks
By Gordon Wilcox
February 05, 2010 3:27 PM
February 05, 2010 3:27 PM
Jefferies is recommending investors shift to a neutral bias on the chemical sector, saying that earnings revisions should top out in the first quarter, muting outperformance in the second half of this year and in 2011. Jefferies add that ''for an early-cyclical sector like chemicals, second-half 2009 was as good as it gets.''
The sector may outperform through the second half of this year, but most of the gains have already been made, Jefferies noted. Valuations appear reasonable for most of the group with most stocks trading in the middle of their historical averages, Jefferies said.
Jefferies top picks in the chemicals group are Albemarle (NYSE: ALB), Solutia (NYSE: SOA), Praxair (NYSE: PX), Airgas (NYSE: ARG) and Ashland (NYSE: ASH).
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