CS First Boston Upgrades Ashland to 'Outperform'

Analyst David Niewood sees improving prospects for the company in asbestos litigation

CS First Boston upgraded Ashland (ASH ) to outperform from neutral.

Analyst David Niewood says prospects for defendants in asbestos mass litigation is improving, prompting the hope that the discount to many stocks is too large. Niewood says Ashland's claims record is good, and he notes the company's dismissal rate of 60% in the past four years at an average cost of $982 per claim.

Niewood takes a more positive view of the refining sector, and notes refining operations make up 50% of the company's earnings. He says new CEO Jim O'Brien is serious in his attempts to improve its specialty chemical division. He cut his 75 cent fourth quarter earnings per share estimate to 45 cents due to weak performance in the road construction business as a result of an unusually wet season. He also raised the $35 target to $40.

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