Market Overview

Is it Time to Take Profits on this Chemical Maker?

Leading into the market opening on Wednesday, W.R. Grace (NYSE: GRA), a $5.54 billion market cap chemical sales and production company, reported a fourth-quarter earnings beat on both the top and bottom lines.

Following the report, research firm Jefferies stated that it maintained its Buy rating on the company, while it raised the price target from $70 to $90. The company cited strong momentum in the stock and great forward cash flow.

Jefferies also highlighted the company's focus to reduce its cost of goods sold, and the positive effect that will have on margins in the coming year.

On the other hand, Monness Crespi Hardt downgraded the company from Buy to Neutral, while raising its price target from $67 to $79. While the firm still sees value in W.R. Grace, it stated that the 30 percent rally over the last 12 months would be difficult to continue, and that the potential for upside was now limited to the single digits.

Both ratings supported the operations of the company, but the downgrade brought up the question of whether or not its time to take some cash off the table.

With a 30 percent gain over the last year, shares can't seem to find resistance and just keep climbing higher. Without any long-term technical resistance levels, things look good on the chart, but whether or not the company can deliver on the fundamentals is another matter.

Risks over the next year have been highlighted as M&A, choppy end markets, and strong discipline from its competitors.

Following the reports, shares remained unchanged in pre-market trading.

Posted-In: Analyst Color Earnings News Guidance Downgrades M&A Analyst Ratings Trading Ideas Best of Benzinga

 

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