Valspar's sales to reach $5bn by 2011 - JPMorgan

01 June 2007 15:16  [Source: ICIS news]

TORONTO (ICIS news)--US paints and coatings maker Valspar is poised for strong results going forward and may reach $5bn in sales by 2011, JPMorgan said on Friday, citing a number of factors.

 

The firm would benefit from acquisitions, demand growth, lower raw material costs and restructuring measures, the analysts said.

 

Sales could grow from $3bn last year to $5bn by 2011, with acquisitions contributing up to 4% to annual growth, said JPMorgan.

 

Geographically, Valspar would benefit from strong growth in China, where the company recently acquired an architectural coatings plant and two wood coatings facilities, while another growth area was Eastern Europe, it added.

 

The acquisition of HB Fuller’s powder coatings business had given Valspar European production capacities in that segment, the analysts said.

 

Minneapolis, Minnesota-based Valspar should also benefit from lower raw material costs, with prices for titanium dioxide (TiO2), acrylic resin and polyethylene (PE) having decreased, JPMorgan said.

 

The overall raw material cost outlook was favourable due to planned large ethylene capacity additions in Saudi Arabia and China, it added.

 

Valspar’s shares closed at $28.89 on Thursday, up 0.84% on the New York Stock Exchange.

By: Stefan Baumgarten
+1 713 525 2653

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