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Ashland (ASH) Wraps Up HEC Expansion, Boosts Production

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Ashland Global Holdings Inc. (ASH - Free Report) recently completed the expansion of Natrosol hydroxyethylcellulose (“HEC”) production in Nanjing, China, that boosted the site’s manufacturing output by nearly 30%.

Ashland, is the global leader in terms of HEC production and sales and has manufacturing facilities in China, United States and Netherlands. HEC is used in industries like personal care, coatings, pharmaceuticals, construction and oil and gas.

Notably, the capacity expansion enables the company to support increasing demand for Natrosol HEC. Continuous expansion helps the company get better return on capital as opposed to building a new plant. It also enhances the company’s cost position.
 
In a year’s time shares of Ashland have moved up 6% compared with the industry’s fall of 7.6%.



During its fiscal fourth-quarter earnings call, Ashland said that it expects adjusted earnings per share (EPS) in the range of $4.20-$4.40 for fiscal 2019. The company expects to generate roughly $230 million in free cash flow in fiscal 2019.

Adjusted EPS for first-quarter fiscal 2019 is projected in the band of 55-65 cents compared with 42 cents a year ago.
 
Ashland is benefiting from strong operational performance and appropriate pricing actions in response to raw material cost inflation. The company is also gaining from actions to grow its premium mix, its focus on improving asset utilization and cost management.

Ashland Global Holdings Inc. Price and Consensus

 

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , BHP Billiton PLC and Ingevity Corporation (NGVT - Free Report) .
 
Mosaic has an expected long-term earnings growth rate of 7% and a Zacks Rank #1 (Strong Buy). The company’s shares have rallied 33.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP Billiton has an expected long-term earnings growth rate of 5.2% and a Zacks Rank #2 (Buy). The company’s shares have climbed 5.4% in the past year.

Ingevity has an expected long-term earnings growth rate of 12% and a Zacks Rank #2. The company’s shares have gained 21.1% over the past year.

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Ashland Inc. (ASH) - free report >>

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Ingevity Corporation (NGVT) - free report >>

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