Citigroup boosts Georgia Gulf target by 53%

10 May 2007 15:15  [Source: ICIS news]

TORONTO (ICIS news)--Citigroup has raised its price target for the shares of US chemicals maker Georgia Gulf by $8 to $23/share and upgraded the stock to Buy from Sell on improved near-term prospects, the analysts said in a note on Thursday.

 

Georgia Gulf’s shares were priced at $19.05/share, up 7.57%, in early Thursday morning trading in New York.

 

Georgia’s core chlor-alkali and polyvinyl chloride (PVC) businesses should improve in the next two quarters, Citigroup said.

 

Chlorine and PVC price were already on an upward trend, it added.

 

At the same time, some competitors in the US vinyl chloride monomer (VCM) industry were experiencing operational problems in the second quarter, which should allow Georgia to benefit near-term, the analysts said.

 

The company’s management appeared to be taking strong action to achieve synergies from the acquisition last year of Canada’s Royal Group Technologies, a producer of PVC and polymer-based building products.

 

Royal Group was a well regarded name in the industry but had been poorly run, the analysts said.

 

Citigroup said Georgia’s share price, down 40% in the past 12 months, seemed to factor in all negative news.

 

However, US housing remained the biggest risk to Georgia, given its increased exposure to the sector after the Royal Group acquisition, Citigroup said.

 

Longer term, the US PVC industry still had structural issues due to capacity additions, it added.

 

($1= €0.74)

By: Stefan Baumgarten
+1 713 525 2653

< previous article(VIDEO - ICIS news Europe Lunchtime Bulletin 29 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly