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Axiall may attract activist or acquirer after downside guidance, Citi says

  • After Axiall's (AXLL -3.1%) second straight negative earnings pre-announcement, Citigroup says investor patience is running thin and that an activist or an acquirer could take a look at the company.
  • Citi thinks LyondellBasell (LYB) “could afford” to take a look at AXLL, but notes that LYB has stated its preference for returning cash to shareholders over acquisitions; the firm cuts its AXLL price target to $48 from $49 and keeps a Neutral rating on the stock.
  • Cowen analysts say they would use any weakness in AXLL following the pre-announcement as a buying opportunity, seeing stronger PVC prices heading into Q3, due in part to competitor ethylene outages that could constrain PVC production.
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