25 October 2007 10:56 [Source: ICIS news]
MUMBAI (ICIS news)--Bank of America (BoA) raised its 2007 and 2008 earnings estimate on NOVA Chemicals to reflect strength in olefin and polyolefin margins, the bank said on Thursday.
The bank raised its 2007 earnings per share (EPS) estimate on the Canada-based chemical producer to $3.75 (€2.62) from $3.45 and its 2008 EPS estimate to $3.25 from $3.05.
BoA raised its 2007 revenue estimate to $6.72bn from $6.61bn. The company reported vastly improved third-quarter operating profits of $188m.
"We have grown incrementally less wary given the recent positive trends in ethylene margins and the ongoing industry restructuring of styrenics," it said.
The bank said NOVA benefited from a strong export market and the so-called Alberta advantage - the company’s access to relatively low-cost ethane feedstock compared with the increasingly expensive prices utilised by its US Gulf coast competitors.
"We remain cautious on the stock as a function of low margins in styrenics. We believe that NOVA's strategic actions in commodity styrenics are well founded but already reflected in the shares," the bank added.
BoA maintained its rating at "sell" and the $35/share price target on the stock.
Shares of the company were down 4% to close at $37.18 on Wednesday on the New York Stock Exchange.
($1 = €0.70)
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