Goldman's Upgrade To Buy Spikes Univar Shares Upwards By 6%

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Goldman Sachs' Robert Koort upgraded
Univar Inc.UNVR
from Neutral to Buy ripping the stock price upwards by 6%. Koort raised the price target to $22 from $18. Koort felt UNVR is "primed to benefit from a rejuvenated growth story as oil&gas headwinds subside." He explained this coupled with board member Stephen Newlin taking over as CEO will cause "UNVR's narrative to shift positively to focus on strong cash flows, margin improvement potential, and attractive valuation" in comparison with primary peer
Brennatag AGBNR
. UNVR showed strong results in Q1 when it beat EBITDA estimates by 15% and had "solid underlying volume growth (+2% globally excl. oil&gas)" Koort stated. Negative earnings outlook since Univar's IPO in June 2015 are expected to "reverse course" as noted by Koort. He views Mr. Newlin's track record at
PolyOne CorporationPOL
, which saw "impressive earnings, margin and share price gains during his tenure," as the main catalyst for the upgrade. In addition to internal changes the "ongoing efforts to supplement the portfolio through higher-margin services and incremental acquisitions" are crucial to the changing sentiment around UNVR and will allow the company to "narrow its valuation discount to Brenntag" Koort noted.
Posted In: Analyst ColorNewsUpgradesPrice TargetAnalyst Ratings
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