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Ashland (ASH) Inks New Composites Distribution Agreement

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Ashland Global Holdings Inc. (ASH - Free Report) has inked a new distribution agreement with an IMCD company — VELOX.  Per the deal, effective Dec 12, 2018, VELOX will be Ashland’s chief composites distributor for the Nordic countries of Denmark, Sweden and Norway.

The agreement includes all Ashland’s unsaturated polyester resin, low-profile additives products, gel coat and epoxy vinyl ester resins. The company expects that its favorable manufacturing footprint along with the expertise of VELOX is likely to boost growth in the region.

In a year’s time, shares of Ashland have increased 5.9%, against the industry’s 7.4% decline.



In December 2018, Ashland provided fiscal 2019 financial view and reaffirmed business outlook. The latest projections reflect the adoption of discontinued operations accounting for the Composites unit and butanediol manufacturing facility in Germany due to the pending divestiture to INEOS Enterprises in a deal valued at roughly $1.1 billion.

The company projects adjusted earnings per share (EPS) for fiscal 2019 in the range of $3.10-$3.40, down from the prior view of $4.20-$4.40.

Adjusted EBITDA expectations for the Specialty Ingredients unit are unchanged at $610-$635 million and the same for the Composites business is not applicable. For the Intermediates & Solvents business, adjusted EBITDA is projected at $20-$30 million, down from previous expectation of $55-$65 million.

Adjusted EPS for first quarter of fiscal 2019 is projected in the band of 5-15 cents, down from previous expectation of 55-65 cents.

Zacks Rank & Key Picks

Ashland currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are Ingevity Corporation (NGVT - Free Report) , Cameco Corporation (CCJ - Free Report) and Israel Chemicals Ltd. (ICL - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity has an expected earnings growth rate of 21.5% for 2019. The company’s shares have gained 15.5% in the past year.

Cameco has an expected earnings growth rate of 20% for 2019. Its shares have rallied 27.7% in a year’s time.

Israel Chemicals has an expected earnings growth rate of 5.4% for 2019. Its shares have rallied 32% in a year’s time.

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