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Global Sell-Off and Chemical Updates for Week Ended February 9

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Part 3
Global Sell-Off and Chemical Updates for Week Ended February 9 PART 3 OF 4

Updates on Ashland’s Product Price Increases

Ashland hikes product prices

On February 5, 2018, Ashland (ASH) increased its price for maleic anhydride by $0.04 per pound, which is expected to impact the North American region. This price increase would be effective on February 19 or as its contracts allow. 

Maleic anhydrides are used in the manufacture of polyester resins. The price increase primarily resulted from higher demand and limited supply.

Updates on Ashland&#8217;s Product Price Increases

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Ashland (ASH) also hiked the prices of Dextrol, Phlex, vinyl caprolactam, and others products that are used in industrial applications. The prices of these products were increased up to 15.0%, and these increases would be effective immediately or as its contracts allow. 

These price hikes are applicable to all regions and were due to increases in the cost of raw materials and the supply chain.

These price hikes would help ASH increase its revenues with the assumption that volumes remain steady. This impact would be visible in its 1Q18 earnings.

Ashland’s stock price updates

For the week ended February 9, 2018, Ashland’s (ASH) stock price fell 5.6% and closed at $69.77. Despite a significant fall during the week, the stock traded on par with its 100-day moving average price of $69.77. Year-to-date, its stock has gained 2.5%. 

However, analysts have projected a target price of $80.00, which implies a return potential of 14.6% over its February 9, 2018, closing price. ASH’s 14-day relative strength index (or RSI) of 40 indicates that the stock is neither overbought nor oversold.

Investors can gain indirect exposure to the PowerShares S&P MidCap Low Volatility ETF (XMLV), which invests 1.4% of its portfolio in Ashland. XMLV also holds Brown & Brown (BRO), Westar Energy (WR), and Rollins (ROL), which had weights in the ETF of 1.6%, 1.5%, and 1.3%, respectively, on February 9, 2018.

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