W.R. Grace downgraded at Jefferies on medium-term risks

|About: W.R. Grace & Co. (GRA)|By:, SA News Editor

W.R. Grace (GRA -3.4%) falls to its lowest levels since February as Jefferies downgrades shares to Hold from Buy, saying the recent dip in relative multiples may not suffice to negate medium-term risks.

Jefferies says risks include a sharp drop in free cash flow conversion once net operating loss carry-forwards are exploited, and demand risks for gasoline, which threaten to push multiples farther out.

GRA’s participation in future “risk off/weak $/near-term FCF yield” rally could be more limited than in 2014-15, the firm says.