GRA

W.R. Grace & Co.

Industrial/Transportation


Presented:04/10/2019
Price:$77.53
Cap:$5.18B
Current Price:$69.99
Cap:$4.67B

Presented

Date04/10/2019
Price$77.53
Market Cap$5.18B
Ent Value$6.14B
P/E Ratio31.13x
Book Value$4.95
Div Yield1.12%
Shares O/S66.86M
Ave Daily Vol542,233
Short IntN/A

Current

Price$69.99
Market Cap$4.67B
W.R. Grace & Co. engages in the production and sale of chemicals and materials. It operates through the Grace Catalysts Technologies and Grace Materials Technologies segments. The Grace Catalysts Technologies segment includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications. The Grace Materials Technologies segment includes materials, including silica-based and silica-alumina-based materials, used in coatings, consumer, industrial, and pharmaceutical applications. The company was founded by William Russell Grace in 1854 and is headquartered in Columbia, MD.

Publicly traded companies mentioned herein: Albemarle Corp (ALB), Clariant AG (CLN SW) Honeywell International Inc (HON), W.R. Grace and Company (GRA)

Highlights

The presenter is long shares of WR Grace (GRA), citing strong pricing power and a favorable market setup in the short- and long-run. With the stock at ~$77 (~15x the Street’s 2020 EPS forecast of $5.13), the upside potential is underappreciated by the market. If GRA can earn $5.30 - $5.40 per share in 2020, which he believes is possible, then the multiple should expand toward 20x to reflect the pricing power and strategic value of the business. This results in a price target range of $105 - $110, with optionality around GRA becoming an acquisition target (as has been speculated for years).

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Idea Discussion

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