Kraton Performance Polymers (KRA +15.5%) is surging on its acquisition of the styrenic block copolymer operations of LCY Chemical.
Goldman Sachs believes the merger makes strategic sense and should strengthen KRA's balance sheet and cash flow metrics: "The combination of KRA's innovative R&D and LCY’s cost-effective manufacturing base with closer geographical proximity to faster-growing Asian markets makes sense... Targeted synergies of 3% of pro-forma sales seem conservative relative to the industry-average of 7.5% targeted in precedent transactions."
Goldman has a Neutral rating on KRA with a price target of $24.
Kraton Performance Polymers (KRA -1.2%) slips after SunTrust Robinson Humphrey has a change of heart (see April 12 upgrade) and cuts the shares to Neutral from Buy (price target to $21 from $25) citing a less rosy outlook for roofing and paving products in the U.S. and Europe.
Kraton Performance Polymers (KRA -1.6%) slides today on an Oppenheimer downgrade to Market Perform, saying it's expecting results to contract for the synthetic-rubber maker over the near-term. The firm notes that the stock has been highly correlated to the moves in butadiene, and spot prices have slumped over the past 6 weeks in Asia. The chemical can't be inventoried, making it a leading indicator of demand, which currently appears quite weak.
Kraton Polymers (KRA -11.6%) is downgraded to Neutral by Macquarie, which cites a choppy product demand setting and a near-term stalling of per-unit profits. The firm says estimates are missing the volume collapse that tends to accompany a 40% Q/Q decline in prices for butadiene, KRA's principal raw material, as product buyers await lower prices.
Kraton Performance Polymers (KRA -3.4%) is cut to Sell from Neutral by Goldman Sachs after the stock's recent rally following improving sentiment and signs that destocking is abating. Goldman says the share price has "risen too far, too fast without the fundamental improvements to justify the outperformance."