Research from Water Tower Research, Water Tower Research

Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Research from Water Tower Research

Equity Research Firm

Thematic (Sector/Industry)

Multiple Countries / Thematic (Sector/Industry)

<h2>KEY HIGHLIGHTS</h2>
<div></div>
<ul>
<li>WTR-CMI last week.&nbsp;In a down week for the market, the Russell 2000 posted a (4.6%) return and our WTR-CMI index of 30 chemical and material technology stocks didn’t do much better at (4.0%). Both underperformed the large cap S&amp;P 500, which delivered a 1.3% drop for the week.</li>
<li>Winners and losers. Only eight of the 30 stocks in our index posted a positive return last week, led by FMC’s 5.5% appreciation, driven by high expectations for the ag-chem market, which was also a factor in CTVA’s 2.3% improvement. RPM’s stronger than expected F3Q22 drove the stock up 3.5%, with read-across possibly likely contributing to SHW’s 3.4% performance and also benefiting AXTA and PPG. On the other hand, after a previous pop on expectations of greater financial support from the federal government, lithium names corrected last week, with LAC down 20.2%, PLL giving up 9.5%, and ALB and LTHM seeing their prices correct (6.2%) and (8.8%) respectively. KOP’s dropped 10.4% for the week, continuing the correction begun mid-March.</li>
<li>EV growth drives lithium demand. Although lithium stocks lost ground last week as the euphoria over the federal government’s stated intentions dissipated, the industry’s prospects remain bright. As EV volumes continue to soar availability of key battery materials remains a concern, prompting ALB’s joint venture to&nbsp;accelerate the timetable for the restart&nbsp;of the Wodgina spodumene mine in Australia.</li>
<li>Farmer sentiment sours on war in Ukraine. CME/Perdue’s&nbsp;Ag Economy Barometer&nbsp;reported a sharp drop in March in American farmers’ expectations to levels not seen since 2016. Growing concerns about the war in Ukraine and its potential impact on the flow of agricultural inputs, and therefore their prices, were top of farmers’ minds when the survey was taken. And for good reason, as we examine below.</li>
<li>Packaging adhesives growth outlook. A typically GDP-minus growth market, packaging adhesives are expected to see a stronger 3.4% CAGR through 2027, driven by post-Covid changes in consumer preferences and innovation, particularly around sustainability. This is good news for FUL, a pure-play adhesives company, as well as companies like AVNT, which supply specialty plastics to the packaging industry.</li>
</ul>
<h2>WTR-CMI WEEKLY PERFORMANCE</h2>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/268/644/original/image_328564352131649900560762.png?1649900562" class="editor-image img-responsive" data-smartkarma-image-id="268644"></figure>
<h2>Lithium &amp; EV Ecosystem Developments</h2>
<p>EV growth puts pressure on the supply chain to catch up. While overall 1Q22 performance of the automotive industry continued to suffer from supply disruptions and, as the quarter ended, the impact of the war in Ukraine, EVs remain a bright spot. As battery-based power-train adoption gains momentum in Europe and North America,&nbsp;BMW reported&nbsp;more than a doubling of its EV sales in 1Q22, while&nbsp;Mercedes posted&nbsp;even better 210% Y/Y growth in EVs in its 1Q22. We are sure these strong results are not an exception, but rather an indication of the overall expansion of EVs’ role in the transportation of the future, as evidenced by the continuing growth of Tesla volumes, which saw another doubling in Germany in 1Q22. Meanwhile, companies up and down the supply chain are gearing up to keep up with the expected ramp-up in demand. To that end, CATL, China’s largest battery supplier for electric vehicles,&nbsp;received permission last week&nbsp;from the German state of Thuringia to produce eight gigawatt-hours of battery cells a year at a new plant the company has been building since 2019. It will allow CATL to begin commercial production of battery cells at this plant by the end of this year. However, this and other battery plants ramping up production across the world in the next 2-3 years will need critical materials, mainly metals, such as lithium, cobalt, and nickel, but also other materials, such as graphite, in order to produce. With metal resources, particularly cobalt and nickel, being in limited supply, and with deposits occurring in geographies that are not always easy to operate in, automotive and battery companies are seeking to ensure their share of the (so far) limited supply. China, the leader in EV adoption and therefore production,&nbsp;is moving rapidly&nbsp;to do just that.</p>
<h2>Automotive &amp; Transportation</h2>
<p>Another tough month for the industry. As we expected, March 2022 results being reported by automotive companies, besides comping against post-pandemic recovery in pent-up demand, continue to be impacted by supply chain disruptions, logistics, and lack of availability of semiconductors. Putin’s war in Ukraine has only clouded and complicated the picture further.&nbsp;German sales declined 18%&nbsp;in March, resulting in a 4.6% decline for 1Q22.&nbsp;UK saw new car sales decline 14%&nbsp;Y/Y in March, with 1Q22 being down 1.9%. March sales were the lowest for the month since 1998.&nbsp;Canadian market fared even worse, with March sales down 20% and 1Q22 down 12% Y/Y. Impacted directly by frequent and extended Covid-related lockdowns,&nbsp;China auto sales slumped 11%&nbsp;in March, although 1Q22 eked out a 0.5% Y/Y growth. The latest lockdowns in Shanghai are having a predictably adverse impact on auto production in the region, with&nbsp;Tesla and BMW feeling the pinch. Supply disruptions, unfortunately, are not limited to China, or companies operating there. Citing supply chain issues,&nbsp;Toyota recently lowered&nbsp;its production outlook for North America by 6%. We are concerned that this may indicate the hope for a 2H22 recovery (and we previously mentioned that April and May 2022 comps will be almost as difficult as March’s) could be optimistic. We therefore remain cautious on stocks in our index with significant exposure to the automotive industry, including PPG AXTA, FUL, AVNT, and HXL, among others.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Biologics gaining market acceptance. While representing only a mid-teens share of the broader crop protection market, bio-based products are continuing to make inroads into the market. Recently, Argentina—the second largest producer and exporter of ag products in LATAM— played host to the&nbsp;first event on bio-based inputs, where the industry’s players were able to gather and exchange ideas and strategies. The event was timely as Argentinian bio-based companies are expanding their operations globally. As we mentioned in our previous Mat-Chem Notes, Marrone Bio Solutions (NASDAQ: MBII) is currently working on a merger with Argentinian Bioceres Crop Solutions (NASDAQ: BIOX).</p>
<p>Cost and availability of inputs top of mind this season. US farmers are planning to plant 4% fewer acres of major crops (soybean, corn, wheat and cotton) compared to last year, largely due to fertilizer prices. But while price is the main concern when it comes to fertilizer,&nbsp;availability tops the list of worries&nbsp;when it comes to herbicides. And the situation isn’t expected to get much better in 2023, with the&nbsp;war in Ukraine and inflationary pressures&nbsp;on input costs, farmland prices, and equipment and labor costs expected to continue to impact the market.</p>
<p>No poop for you. Speaking of fertilizer prices, the last time the industry saw prices at this level, it created significant demand destruction among US farmers, as they either lowered their application rates per acre, or substituted an old standby—manure—in order to meet their needs. However, in this cycle we’re seeing prices go up both because of increases in energy and other input costs, and also because of availability concerns. Consequently, the once reliable&nbsp;supply of manure is being stressed as well, with prices doubling in some cases and availability becoming an issue too. Given the precarious outlook for supply availability of inputs, and consequently the quantity and quality of crops to be harvested this year and next, is it any surprise that&nbsp;China is back in the US&nbsp;market buying up grain?</p>
<p>Whether one believes we’ve entered an uncharted territory of a super cycle in the ag market, or not, it is becoming increasingly clear that the war between two of the largest ag producer and exporter nations, not to mention major suppliers of fertilizers, will have a profound and protracted impact on commodity grain and ag-input markets. Consequently, it appears likely that performance of FMC, CTVA, AVD, CF and others will continue to surprise to the upside.</p>
<h2>In Other Chemicals and Materials News</h2>
<p>Commodity prices continue to soar. Commodity plastic resins, such as high density polyethylene (HDPE) and polypropylene (PP) are&nbsp;continuing to see higher prices in April. And despite the cost advantage of domestic producers vs. Asian counterparts, American manufacturers are unable to take full advantage of the fact, as export logistics remain convoluted, keeping export volumes below the levels needed to alleviate warehouse crowding. If shipping issues remain unresolved, curtailing domestic production at some point this year may become necessary, regardless of global demand. Higher oil and gas prices and lower volumes do not make for good margins for commodity chemical companies, such as DOW, LYB, CE, among others. Tread with caution. Another area of inflating raw materials is the TiO2&nbsp;market. Since China entered the industry in a big way over a decade ago, TiO2 price cycles have largely followed Chinese capacity expansion announcements and realizations. And while there has been a slew of announcements over the past several months, capacity additions in the country are uncertain and the&nbsp;producers’ ability to profitably manufacture and export&nbsp;the pigment is even more so. It therefore appears likely that high pigment prices will remain a feature of the market for months, if not a year or more, to come. As a major input cost for paint manufacturers, ongoing elevated TiO2&nbsp;prices do not bode well for paint companies’ margins. And while the inflation cycle we’re experiencing may be unprecedented in recent decades, historically margin pressures driven by raw material costs have not been positive for coating companies’ stock prices. We therefore remain cautious on SHW, PPG, RPM, and AXTA, among others.</p>
<h2>Rating and Price Target Changes</h2>
<p>ALB&nbsp;– KeyBank raised its price target (PT) to $198 from $163 but reiterated its Underweight recommendation; UBS lowered its PT to $288 from $320 but reiterated its Buy rating.</p>
<p>ASH&nbsp;– UBS lowered its PT to $125 from $136 and reiterated its Buy rating.</p>
<p>AXTA&nbsp;– UBS lowered its PT to $33 from $39 and reiterated its Buy rating.</p>
<p>CTVA&nbsp;– KeyBank raised its PT to $63 from $58 and reiterated its Overweight recommendation; UBS raised its PT to $67 from $58 and reiterated its Buy rating.</p>
<p>ECL&nbsp;– Atlantic Securities initiated coverage with an Outperform rating and $2,210 PT; UBS lowered its PT to $177 from $196 and reiterated its Buy rating.</p>
<p>EMN&nbsp;– KeyBank lowered its PT to $142 from $150 and reiterated its Overweight rating; Wells Fargo also lowered its PT to $128 from $138, while reiterating its Overweight rating.</p>
<p>FMC&nbsp;– Wells Fargo raised its PT to $150 from $130 and reiterated its Overweight recommendation; UBS also raised its PT to $149 from $136 and reiterated its Buy.</p>
<p>LAC&nbsp;– Deutsche Bank raised its PT to $40 from $34 and reiterated its Buy rating.</p>
<p>RPM&nbsp;– CFRA upgraded the stock to Neutral from Sell; Wells Fargo lowered its PT to $95 from $100 and maintained its Equal Weight recommendation; UBS lowered its PT to $106 from $115, but reiterated its Buy rating.</p>
<p>SHW&nbsp;– Evercore ISI raised its PT to $325 from $320 and reiterated its Outperform rating; Loop Capital lowered its PT to $300 from $345, but reiterated its Buy recommendation; UBS also lowered its PT to $280 from $325, maintaining its Neutral rating.</p>
<h2>DISCLOSURES</h2>
<div></div>
<p>Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.<br><br>WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.<br><br>Dmitry Silversteyn, who is the writer of this report, covers the Chemicals &amp; Materials Technology and BioEconomy sectors for WTR. Mr. Silversteyn and members of his household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.<br><br>Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.<br><br>In certain instances, including this report, WTR will write research covering non-clients. Readers should assume that WTR may seek to turn these non-paying companies into paying clients. Likewise, WTR may seek to transform these non-clients into paying clients of it or of its affiliate, which provides services such as presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services of WTR or an affiliate might offer to clients.<br><br>The manner of WTR’s potential research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly written compliance guidelines.<br><br>The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors or agents shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.<br><br>All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.</p>

KEY HIGHLIGHTS


WTR-CMI last week.&nbsp;In a down week for the market, the Russell 2000 posted a (4.6%) return and our WTR-CMI index of 30 chemical and material technology stocks didn’t do much better at (4.0%). Both underperformed the large cap S&amp;P 500, which delivered a 1.3% drop for the week.
Winners and losers. Only eight of the 30 stocks in our index posted a positive return last week, led by FMC’s 5.5% appreciation, driven by high expectations for the ag-chem market, which was also a factor in CTVA’s 2.3% improvement. RPM’s stronger than expected F3Q22 drove the stock up 3.5%, with read-across possibly likely contributing to SHW’s 3.4% performance and also benefiting AXTA and PPG. On the other hand, after a previous pop on expectations of greater financial support from the federal government, lithium names corrected last week, with LAC down 20.2%, PLL giving up 9.5%, and ALB and LTHM seeing their prices correct (6.2%) and (8.8%) respectively. KOP’s dropped 10.4% for the week, continuing the correction begun mid-March.
EV growth drives lithium demand. Although lithium stocks lost ground last week as the euphoria over the federal government’s stated intentions dissipated, the industry’s prospects remain bright. As EV volumes continue to soar availability of key battery materials remains a concern, prompting ALB’s joint venture to&nbsp;accelerate the timetable for the restart&nbsp;of the Wodgina spodumene mine in Australia.
Farmer sentiment sours on war in Ukraine. CME/Perdue’s&nbsp;Ag Economy Barometer&nbsp;reported a sharp drop in March in American farmers’ expectations to levels not seen since 2016. Growing concerns about the war in Ukraine and its potential impact on the flow of agricultural inputs, and therefore their prices, were top of farmers’ minds when the survey was taken. And for good reason, as we examine below.
Packaging adhesives growth outlook. A typically GDP-minus growth market, packaging adhesives are expected to see a stronger 3.4% CAGR through 2027, driven by post-Covid changes in consumer preferences and innovation, particularly around sustainability. This is good news for FUL, a pure-play adhesives company, as well as companies like AVNT, which supply specialty plastics to the packaging industry.

WTR-CMI WEEKLY PERFORMANCE

Lithium &amp; EV Ecosystem Developments
EV growth puts pressure on the supply chain to catch up. While overall 1Q22 performance of the automotive industry continued to suffer from supply disruptions and, as the quarter ended, the impact of the war in Ukraine, EVs remain a bright spot. As battery-based power-train adoption gains momentum in Europe and North America,&nbsp;BMW reported&nbsp;more than a doubling of its EV sales in 1Q22, while&nbsp;Mercedes posted&nbsp;even better 210% Y/Y growth in EVs in its 1Q22. We are sure these strong results are not an exception, but rather an indication of the overall expansion of EVs’ role in the transportation of the future, as evidenced by the continuing growth of Tesla volumes, which saw another doubling in Germany in 1Q22. Meanwhile, companies up and down the supply chain are gearing up to keep up with the expected ramp-up in demand. To that end, CATL, China’s largest battery supplier for electric vehicles,&nbsp;received permission last week&nbsp;from the German state of Thuringia to produce eight gigawatt-hours of battery cells a year at a new plant the company has been building since 2019. It will allow CATL to begin commercial production of battery cells at this plant by the end of this year. However, this and other battery plants ramping up production across the world in the next 2-3 years will need critical materials, mainly metals, such as lithium, cobalt, and nickel, but also other materials, such as graphite, in order to produce. With metal resources, particularly cobalt and nickel, being in limited supply, and with deposits occurring in geographies that are not always easy to operate in, automotive and battery companies are seeking to ensure their share of the (so far) limited supply. China, the leader in EV adoption and therefore production,&nbsp;is moving rapidly&nbsp;to do just that.
Automotive &amp; Transportation
Another tough month for the industry. As we expected, March 2022 results being reported by automotive companies, besides comping against post-pandemic recovery in pent-up demand, continue to be impacted by supply chain disruptions, logistics, and lack of availability of semiconductors. Putin’s war in Ukraine has only clouded and complicated the picture further.&nbsp;German sales declined 18%&nbsp;in March, resulting in a 4.6% decline for 1Q22.&nbsp;UK saw new car sales decline 14%&nbsp;Y/Y in March, with 1Q22 being down 1.9%. March sales were the lowest for the month since 1998.&nbsp;Canadian market fared even worse, with March sales down 20% and 1Q22 down 12% Y/Y. Impacted directly by frequent and extended Covid-related lockdowns,&nbsp;China auto sales slumped 11%&nbsp;in March, although 1Q22 eked out a 0.5% Y/Y growth. The latest lockdowns in Shanghai are having a predictably adverse impact on auto production in the region, with&nbsp;Tesla and BMW feeling the pinch. Supply disruptions, unfortunately, are not limited to China, or companies operating there. Citing supply chain issues,&nbsp;Toyota recently lowered&nbsp;its production outlook for North America by 6%. We are concerned that this may indicate the hope for a 2H22 recovery (and we previously mentioned that April and May 2022 comps will be almost as difficult as March’s) could be optimistic. We therefore remain cautious on stocks in our index with significant exposure to the automotive industry, including PPG AXTA, FUL, AVNT, and HXL, among others.
Ag-Chem and Ag-Tech
Biologics gaining market acceptance. While representing only a mid-teens share of the broader crop protection market, bio-based products are continuing to make inroads into the market. Recently, Argentina—the second largest producer and exporter of ag products in LATAM— played host to the&nbsp;first event on bio-based inputs, where the industry’s players were able to gather and exchange ideas and strategies. The event was timely as Argentinian bio-based companies are expanding their operations globally. As we mentioned in our previous Mat-Chem Notes, Marrone Bio Solutions (NASDAQ: MBII) is currently working on a merger with Argentinian Bioceres Crop Solutions (NASDAQ: BIOX).
Cost and availability of inputs top of mind this season. US farmers are planning to plant 4% fewer acres of major crops (soybean, corn, wheat and cotton) compared to last year, largely due to fertilizer prices. But while price is the main concern when it comes to fertilizer,&nbsp;availability tops the list of worries&nbsp;when it comes to herbicides. And the situation isn’t expected to get much better in 2023, with the&nbsp;war in Ukraine and inflationary pressures&nbsp;on input costs, farmland prices, and equipment and labor costs expected to continue to impact the market.
No poop for you. Speaking of fertilizer prices, the last time the industry saw prices at this level, it created significant demand destruction among US farmers, as they either lowered their application rates per acre, or substituted an old standby—manure—in order to meet their needs. However, in this cycle we’re seeing prices go up both because of increases in energy and other input costs, and also because of availability concerns. Consequently, the once reliable&nbsp;supply of manure is being stressed as well, with prices doubling in some cases and availability becoming an issue too. Given the precarious outlook for supply availability of inputs, and consequently the quantity and quality of crops to be harvested this year and next, is it any surprise that&nbsp;China is back in the US&nbsp;market buying up grain?
Whether one believes we’ve entered an uncharted territory of a super cycle in the ag market, or not, it is becoming increasingly clear that the war between two of the largest ag producer and exporter nations, not to mention major suppliers of fertilizers, will have a profound and protracted impact on commodity grain and ag-input markets. Consequently, it appears likely that performance of FMC, CTVA, AVD, CF and others will continue to surprise to the upside.
In Other Chemicals and Materials News
Commodity prices continue to soar. Commodity plastic resins, such as high density polyethylene (HDPE) and polypropylene (PP) are&nbsp;continuing to see higher prices in April. And despite the cost advantage of domestic producers vs. Asian counterparts, American manufacturers are unable to take full advantage of the fact, as export logistics remain convoluted, keeping export volumes below the levels needed to alleviate warehouse crowding. If shipping issues remain unresolved, curtailing domestic production at some point this year may become necessary, regardless of global demand. Higher oil and gas prices and lower volumes do not make for good margins for commodity chemical companies, such as DOW, LYB, CE, among others. Tread with caution. Another area of inflating raw materials is the TiO2&nbsp;market. Since China entered the industry in a big way over a decade ago, TiO2 price cycles have largely followed Chinese capacity expansion announcements and realizations. And while there has been a slew of announcements over the past several months, capacity additions in the country are uncertain and the&nbsp;producers’ ability to profitably manufacture and export&nbsp;the pigment is even more so. It therefore appears likely that high pigment prices will remain a feature of the market for months, if not a year or more, to come. As a major input cost for paint manufacturers, ongoing elevated TiO2&nbsp;prices do not bode well for paint companies’ margins. And while the inflation cycle we’re experiencing may be unprecedented in recent decades, historically margin pressures driven by raw material costs have not been positive for coating companies’ stock prices. We therefore remain cautious on SHW, PPG, RPM, and AXTA, among others.
Rating and Price Target Changes
ALB&nbsp;– KeyBank raised its price target (PT) to $198 from $163 but reiterated its Underweight recommendation; UBS lowered its PT to $288 from $320 but reiterated its Buy rating.
ASH&nbsp;– UBS lowered its PT to $125 from $136 and reiterated its Buy rating.
AXTA&nbsp;– UBS lowered its PT to $33 from $39 and reiterated its Buy rating.
CTVA&nbsp;– KeyBank raised its PT to $63 from $58 and reiterated its Overweight recommendation; UBS raised its PT to $67 from $58 and reiterated its Buy rating.
ECL&nbsp;– Atlantic Securities initiated coverage with an Outperform rating and $2,210 PT; UBS lowered its PT to $177 from $196 and reiterated its Buy rating.
EMN&nbsp;– KeyBank lowered its PT to $142 from $150 and reiterated its Overweight rating; Wells Fargo also lowered its PT to $128 from $138, while reiterating its Overweight rating.
FMC&nbsp;– Wells Fargo raised its PT to $150 from $130 and reiterated its Overweight recommendation; UBS also raised its PT to $149 from $136 and reiterated its Buy.
LAC&nbsp;– Deutsche Bank raised its PT to $40 from $34 and reiterated its Buy rating.
RPM&nbsp;– CFRA upgraded the stock to Neutral from Sell; Wells Fargo lowered its PT to $95 from $100 and maintained its Equal Weight recommendation; UBS lowered its PT to $106 from $115, but reiterated its Buy rating.
SHW&nbsp;– Evercore ISI raised its PT to $325 from $320 and reiterated its Outperform rating; Loop Capital lowered its PT to $300 from $345, but reiterated its Buy recommendation; UBS also lowered its PT to $280 from $325, maintaining its Neutral rating.
DISCLOSURES

Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.  WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information provided in this report should not be construed in any manner whatsoever as personalized advice. All users and readers of WTR’s reports are cautioned to consult their own independent financial, tax and legal advisors prior to purchasing or selling securities.  Dmitry Silversteyn, who is the writer of this report, covers the Chemicals &amp; Materials Technology and BioEconomy sectors for WTR. Mr. Silversteyn and members of his household have no personal or business-related relationship to the subject company other than providing digital content and any ancillary services WTR may offer.  Unless otherwise indicated, WTR intends to provide continuing coverage of the covered companies. WTR will notify its readers through website postings or other appropriate means if WTR determines to terminate coverage of any of the companies covered.  In certain instances, including this report, WTR will write research covering non-clients. Readers should assume that WTR may seek to turn these non-paying companies into paying clients. Likewise, WTR may seek to transform these non-clients into paying clients of it or of its affiliate, which provides services such as presenting at sponsored investor conferences, distributing press releases, advising on investor relations and broader corporate communications and public relations strategies as well as performing certain other related services (“Ancillary Services”). The companies that WTR covers in our research are not required to purchase or use Ancillary Services of WTR or an affiliate might offer to clients.  The manner of WTR’s potential research compensation and Ancillary Services to covered companies raise actual and perceived conflicts of interest. WTR is committed to manage those conflicts to protect its reputation and the objectivity of employees/analysts by adhering to strictly written compliance guidelines.  The views and analyses included in our research reports are based on current public information that we consider to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our analysts, directors, officers, employees, representatives, independent contractors or agents shall be liable for any omissions, errors or inaccuracies, regardless of cause, foreseeability or the lack of timeliness of, or any delay or interruptions in the transmission of our reports to content users. This lack of liability extends to direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, losses, lost income, lost profit or opportunity costs.  All investment information contained herein should be independently verified by the reader or user of this report. For additional information, all readers of this report are encouraged to visit WTR’s website www.watertowerresearch.com.

Mat-Chem Notes for the Week Ended April 10, 2022