Recovery in the US Housing Sector to Boost Arch Chemicals’ Sales in 2010

Analyst Ian Zaffino of Oppenheimer Equity Research maintains his “outperform” rating on Arch Chemicals (NYSE: ARJ). The target price has been raised from $32 to $34.

Oppenheimer Equity Research expects ARJ’s core business segments, Personal Care and Industrial Biocides, to deliver healthy performance in 2010. Oppenheimer Equity Research believes that the global recovery and launch of applications, such as mattress odor control, would drive ARJ’s anti-dandruff sales.

A recovery in the US housing sector is expected to boost Arch Chemicals’ sales further in 2010, since this sector accounts for around $150 million of revenues the company’s chemicals, according to Oppenheimer Equity Research. Oppenheimer Equity Research expects ARJ to sell its non-core Industrial Coatings business in 2010. The analyst believes that the potential sale would boost ARJ’s margins by 30 basis points, since the segment posts almost no profits. ARJ’s shares are attractively priced, according to Oppenheimer Equity Research.