UPDATE: Bank of America Upgrades Axiall as Key PVC Market Improves

In a report published Monday, Bank of America analyst Aleksey V. Yefremov upgraded the rating on

from Neutral to Buy, and raised the price target from $50.00 to $52.00. In the report, Bank of America noted, “We upgrade AXLL from Neutral to Buy. We recently attended investor meetings with management and came away more encouraged about medium-term outlook and capital allocation (see takeaways on page 3). Our Buy thesis is based on attractive valuation and improving fundamentals in key construction-driven markets – PVC resin and Building Products. We believe AXLL will be a beneficiary of a strong construction season in 2014 and further normalization in US residential and nonresidential construction in 2015-2016. "We think that price increases in PVC resin market will more than offset potential weakness in caustic soda over the next 12-24 months. After $0.06/lb in price increases in January-February, we see PVC prices rising another $0.02-0.03/lb in March. Importantly, PVC hikes are also translating into higher prices in the downstream Building Products business.” Axiall Corp. closed on Friday at $43.24.