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>
<ul>
<li>WTR-CMI last week.&nbsp;Last week, the market continued to digest the impact of the war in Europe, global inflation, and continuing supply disruptions due to COVID-19-related lockdowns in parts of China. Nevertheless, the S&amp;P 500 eked out a bare 0.1% gain, and the broader Russell 2000 0.6%. Our WTR-CMI index of 30 chemicals and materials technology stocks outperformed both the indexes by appreciating 1%.</li>
<li>Winners and losers. Once again—and this time propelled by the&nbsp;Biden Administration’s invocation&nbsp;of the War Powers Act to drive faster domestication of the critical EV battery materials industry—lithium stocks led the gains. While LAC surged 13.0% and LTHM 7.1%, KWR and EAF fell (4.2%) and (4.0%), respectively, likely due to their exposure to the steel industry, which saw a volume contraction in 2021 and may continue to underperform in 2022.</li>
<li>More good news for PLL. After recently completing a successful secondary stock offering raising over $100M, PLL got more good news last week as Atlantic Lithium (OTC: ALLIF), in which PLL has an earn-in right, announced a significant 42% upgrade in the&nbsp;mineral resource estimate&nbsp;for its Ewoyaa lithium deposit in Ghana. While still in the early stages, this is a positive development. PLL is currently seeking to complete a permitting process in North Carolina, diversifying its sourcing by taking a lithium mine online in Quebec, and continuing to develop properties in Ghana.</li>
<li>Inflation pressure unremitting. While oil prices have retreated from their war-panic highs, downstream commodities, particularly&nbsp;commodity resins&nbsp;such as polyethylene and polypropylene, remain at elevated levels, with more (albeit modest) price increases expected in the months ahead. With fuel prices at all-time highs in the U.S., food inflation is expected to get worse in 2022, as the U.S. Department of Agriculture&nbsp;(USDA) recently upped&nbsp;its food inflation expectations for the year from 2.5-3.5% to 4.5-5.5%.</li>
<li>Anticorrosion coatings market growth. Demand from end-users in construction, automotive, transportation, consumer durables, and industrial machinery is expected to drive the growth of&nbsp;anti-corrosion coatings&nbsp;by 4% CAGR through 2024.</li>
</ul>
<h2>WTR-CMI WEEKLY PERFORMANCE</h2>
<p>Source: Y-Charts; prices as of April 1 close</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/267/393/original/image_49469512221649294020557.png?1649294023" class="editor-image img-responsive" data-smartkarma-image-id="267393"></figure>
<h2>Lithium &amp; EV Ecosystem Developments</h2>
<p>PLL may get a neighbor… eventually. As PLL works to complete the permitting process for its proposed lithium mine and conversion plant in North Carolina, ALB, one of the largest lithium carbonate producers,&nbsp;is said to be considering&nbsp;reopening its idle Kings Mountain lithium mine in the state, having announced environmental and economic reviews of the plan. At the earliest, these may be competed in late 2023, or more likely in 2024, at which time ALB will decide whether to pursue state and local permits needed to reopen the mine. The Biden Administration’s focus on promoting and enabling faster and greater development of strategically important domestic resources for lithium and other critical EV battery components may accelerate that timetable, or possibly lower/remove, some of the regulatory barriers and red tape needed to domesticate lithium production.</p>
<p>Diversifying out of China. Non-Chinese automotive companies, battery manufacturers, and lithium and graphite providers have been looking to diversify geographically and lower their reliance on China for materials critical to the continuing transition away from fossil fuels. Interestingly, Chinese battery manufacturers are also taking cue. For example, battery maker&nbsp;EVE Energy is looking to build a factory in Hungary&nbsp;to position itself as a local supplier to the growing EV automotive market in Europe.</p>
<p>Beyond lithium. As investors (and industry participants) focus on procuring sufficient lithium to meet the expected demand from a burgeoning EV market, other materials—notably, cobalt, nickel and graphite—may be garnering less attention. However, they are no less, or perhaps more, critical to the success of the EV revolution. This is especially so given that lithium is not a particularly rare metal, and can be found in many places in commercially feasible concentrations, whereas cobalt, nickel and graphite deposits are scarcer and more geographically concentrated, often found in regions not particularly friendly to western democracies. Tesla (NASDAQ: TSLA), for one,&nbsp;has been working diligently&nbsp;to ensure its growth pans are not hampered by battery or battery material shortages. It has been addressing nickel availability specifically by signing multi-year supply deals with nickel producers. Given that demand for nickel in EV batteries is expected to more than triple by 2030 from current levels, and with sanctions on Russia and countersanctions increasing supply risks, other car companies may need to follow Tesla’s lead and ensure alternate nickel supply is available, should Russian nickel become more restricted. The race for EV dominance may come down to the brass tacks, or, more accurately, nickel tacks. Access to key materials in sufficient quantities to facilitate growth is one of the determinants of market success.</p>
<h2>Automotive &amp; Transportation</h2>
<p>A closer look at Russian war’s impact on auto production. As a low labor-cost country strategically located in the heart of Europe, Ukraine is home to 38 factories operated by 22 companies from six countries, representing an investment of more than $550 million since 1998. This production infrastructure, which supported auto manufacturing in other parts of Europe, has been&nbsp;significantly disrupted by Russia’s invasion&nbsp;of the country. The results of this did not have to wait long, as numerous European car companies, as well as U.S. companies with European plants, have begun&nbsp;feeling the pressure of disrupted supply of parts on their ability to produce.</p>
<p>Early March results far from encouraging. The impact of the war in Ukraine, ongoing semiconductor shortages, pandemic-related lockdowns, and tough YoY comps are combining to drive a significant decline in new car registrations.&nbsp;French new car registrations&nbsp;fell 20% YoY in March, and early indications are that the Chinese market saw significant YoY declines as well. As more European Union countries report March results and the data for U.S. registration comes in, we expect to see similar double-digit YoY declines. With the European war showing no signs of subsiding, April and May comps are looking daunting, and the automotive market may not show positive trends till 2H22, if not 2023. Consequently, we remain cautious on companies with high exposure to the transportations sector, including PPG and AXTA, as well as AVNT, FUL, HXL and perhaps even VVV, as these companies deal with reduced demand from a key end market, while managing the impact of higher raw material, transportation and labor costs on their margins.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Putting numbers to the war’ impact on ag production. In the previous issues of Mat-Chem Notes, we highlighted the importance of Ukraine as an exporter of grains, oilseed and cereals. Although&nbsp;early plantings in Ukraine&nbsp;appear to be up 10% compared with last year, concerns are growing that&nbsp;2022 plantings&nbsp;will be barely half of last year’s acreage, with predictable results, as the country may be forced to restrict exports of key commodities to ensure its own population is provided for. Given the U.S. Department of Agriculture’s (USDA) revised inflation outlook mentioned previously, these developments don’t bode well for domestic, let alone global, food prices. Outright shortages in import-dependent regions of the world cannot be ruled out.</p>
<p>Domestic aggrege estimates up but may not be enough to address food security concerns. The&nbsp;USDA released its updated planted acreage report, which includes higher than previously expected soybean plantings and lower corn plantings. Overall acreage increased to 317.4 million acres of principal crops, up 1.2 million acres compared with 2021, which marks a rise of 0.4%. The higher soy vs. corn acreage vs. market expectations is a positive for ag-chem companies such as FMC, CTVA and AVD, as soy acres require significantly more pesticides. On the other hand, lower corn acres may be a slight negative for fertilizer companies such as CF Industries (NYSE: CF), Mosaic (NYSE: MOS) and Nutrien (NYSE: NTR), as corn requires significantly higher levels of fertilizers compared with soy and even wheat.</p>
<p>Lowering carbon footprint of renewable fuel. While the practice of adding ethanol to gasoline formulations has been a strong driver of corn demand in the U.S., justified by expectations of reduced carbon emissions by ICE automobiles, ethanol production itself has come under scrutiny regarding its carbon footprint. A&nbsp;new effort underway to address carbon emission&nbsp;concerns includes a proposed CO2&nbsp;pipeline that would capture and transport CO2&nbsp;generated by ethanol plants in the Midwest, making the process of producing transportation-related ethanol a truly carbon-reducing endeavor.</p>
<p>A commodity super cycle?&nbsp;Three developments in domestic ag market&nbsp;may generate a long-term trend of higher demand and higher prices (and higher farm income), building on the strength of the past two years. These include 1) the ongoing Russia-Ukraine war, which may have long-term impact on the production and export of agricultural commodities even after the conflict ends, 2) the growth in demand for green fuels—from ethanol to bio-diesel to renewable diesel, and, 3) the peak inland area that can be brought under cultivation domestically. This suggests that the strong performance of ag suppliers—from seed companies to fertilizer manufacturers to ag-chem formulators—may have a longer runway of above-trend performance than is being currently envisioned by investors, perhaps warranting an upward re-valuation of the trading multiples of the stocks of these companies.</p>
<h2>In Other Chemicals and Materials News</h2>
<p>M&amp;A activity continues in coatings and adhesives. Having completed its acquisition of a small European powder coatings business,&nbsp;PPG announced&nbsp;last week its divestiture of its African coatings business to Océinde, an industrial group based in Réunion, France. EMN completed the sale of its&nbsp;adhesives resin business Synthomer plc. for $1 billion. SHW also announced the&nbsp;completion of its acquisition&nbsp;of the European industrial coatings business of Sika AG.</p>
<p>Chemical industry doing its part in creating a circular economy. EMN, having&nbsp;announced in January 2022&nbsp;its plan to invest up to $1 billion to build the world's largest material-to-material molecular recycling plant in France, has made further progress and recently announced that it has&nbsp;entered exclusive negotiations&nbsp;with Port-Jerome-sur-Seine authorities in Normandy. Provided the negotiations are successful, Eastman expects the site to be operational by 2025, producing essentially virgin plastic resins from recycled plastic waste. While not a resin producer, AVNT buys significant amount of commodity resins, which it then formulates and compounds with various additives to impart new physical characteristics and create new types of engineered plastic compounds. It is therefore not surprising that the company is keenly interested in playing a role in material stewardship and the circular economy, similar to that of EMN. Recently, AVNT announced an expansion of its recycled content—engineered-plastic compound—offering. This is after it&nbsp;received FDA approval&nbsp;for the use of its thermoplastic elastomer (TPE) resins, which utilize up to 25% of recycled content in certain food-contact applications, offering customers an environmentally friendly choice.</p>
<h2>Rating and Price Target Changes</h2>
<p>FUL&nbsp;– Deutsche Bank reduced its price target (PT) to $72 from $80, and maintained its Hold rating.</p>
<p>FMC&nbsp;– Monness Crespi downgraded the stock to Neutral from Buy.</p>
<p>PPG&nbsp;– BofA lowered its PT to $168 from $186, and reiterated its Buy recommendation; RBC also lowered its PT to $158 from $169, while reiterating its Outperform rating.</p>
<p>IOSP&nbsp;– Seaport Global initiated coverage with a Neutral rating.</p>
<p>SHW&nbsp;– Evercore ISI raised its PT to $320 from $300, and reiterated its Outperform rating.</p>
<h2>DISCLOSURES</h2>
<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;Last week, the market continued to digest the impact of the war in Europe, global inflation, and continuing supply disruptions due to COVID-19-related lockdowns in parts of China. Nevertheless, the S&amp;P 500 eked out a bare 0.1% gain, and the broader Russell 2000 0.6%. Our WTR-CMI index of 30 chemicals and materials technology stocks outperformed both the indexes by appreciating 1%.
Winners and losers. Once again—and this time propelled by the&nbsp;Biden Administration’s invocation&nbsp;of the War Powers Act to drive faster domestication of the critical EV battery materials industry—lithium stocks led the gains. While LAC surged 13.0% and LTHM 7.1%, KWR and EAF fell (4.2%) and (4.0%), respectively, likely due to their exposure to the steel industry, which saw a volume contraction in 2021 and may continue to underperform in 2022.
More good news for PLL. After recently completing a successful secondary stock offering raising over $100M, PLL got more good news last week as Atlantic Lithium (OTC: ALLIF), in which PLL has an earn-in right, announced a significant 42% upgrade in the&nbsp;mineral resource estimate&nbsp;for its Ewoyaa lithium deposit in Ghana. While still in the early stages, this is a positive development. PLL is currently seeking to complete a permitting process in North Carolina, diversifying its sourcing by taking a lithium mine online in Quebec, and continuing to develop properties in Ghana.
Inflation pressure unremitting. While oil prices have retreated from their war-panic highs, downstream commodities, particularly&nbsp;commodity resins&nbsp;such as polyethylene and polypropylene, remain at elevated levels, with more (albeit modest) price increases expected in the months ahead. With fuel prices at all-time highs in the U.S., food inflation is expected to get worse in 2022, as the U.S. Department of Agriculture&nbsp;(USDA) recently upped&nbsp;its food inflation expectations for the year from 2.5-3.5% to 4.5-5.5%.
Anticorrosion coatings market growth. Demand from end-users in construction, automotive, transportation, consumer durables, and industrial machinery is expected to drive the growth of&nbsp;anti-corrosion coatings&nbsp;by 4% CAGR through 2024.

WTR-CMI WEEKLY PERFORMANCE
Source: Y-Charts; prices as of April 1 close

Lithium &amp; EV Ecosystem Developments
PLL may get a neighbor… eventually. As PLL works to complete the permitting process for its proposed lithium mine and conversion plant in North Carolina, ALB, one of the largest lithium carbonate producers,&nbsp;is said to be considering&nbsp;reopening its idle Kings Mountain lithium mine in the state, having announced environmental and economic reviews of the plan. At the earliest, these may be competed in late 2023, or more likely in 2024, at which time ALB will decide whether to pursue state and local permits needed to reopen the mine. The Biden Administration’s focus on promoting and enabling faster and greater development of strategically important domestic resources for lithium and other critical EV battery components may accelerate that timetable, or possibly lower/remove, some of the regulatory barriers and red tape needed to domesticate lithium production.
Diversifying out of China. Non-Chinese automotive companies, battery manufacturers, and lithium and graphite providers have been looking to diversify geographically and lower their reliance on China for materials critical to the continuing transition away from fossil fuels. Interestingly, Chinese battery manufacturers are also taking cue. For example, battery maker&nbsp;EVE Energy is looking to build a factory in Hungary&nbsp;to position itself as a local supplier to the growing EV automotive market in Europe.
Beyond lithium. As investors (and industry participants) focus on procuring sufficient lithium to meet the expected demand from a burgeoning EV market, other materials—notably, cobalt, nickel and graphite—may be garnering less attention. However, they are no less, or perhaps more, critical to the success of the EV revolution. This is especially so given that lithium is not a particularly rare metal, and can be found in many places in commercially feasible concentrations, whereas cobalt, nickel and graphite deposits are scarcer and more geographically concentrated, often found in regions not particularly friendly to western democracies. Tesla (NASDAQ: TSLA), for one,&nbsp;has been working diligently&nbsp;to ensure its growth pans are not hampered by battery or battery material shortages. It has been addressing nickel availability specifically by signing multi-year supply deals with nickel producers. Given that demand for nickel in EV batteries is expected to more than triple by 2030 from current levels, and with sanctions on Russia and countersanctions increasing supply risks, other car companies may need to follow Tesla’s lead and ensure alternate nickel supply is available, should Russian nickel become more restricted. The race for EV dominance may come down to the brass tacks, or, more accurately, nickel tacks. Access to key materials in sufficient quantities to facilitate growth is one of the determinants of market success.
Automotive &amp; Transportation
A closer look at Russian war’s impact on auto production. As a low labor-cost country strategically located in the heart of Europe, Ukraine is home to 38 factories operated by 22 companies from six countries, representing an investment of more than $550 million since 1998. This production infrastructure, which supported auto manufacturing in other parts of Europe, has been&nbsp;significantly disrupted by Russia’s invasion&nbsp;of the country. The results of this did not have to wait long, as numerous European car companies, as well as U.S. companies with European plants, have begun&nbsp;feeling the pressure of disrupted supply of parts on their ability to produce.
Early March results far from encouraging. The impact of the war in Ukraine, ongoing semiconductor shortages, pandemic-related lockdowns, and tough YoY comps are combining to drive a significant decline in new car registrations.&nbsp;French new car registrations&nbsp;fell 20% YoY in March, and early indications are that the Chinese market saw significant YoY declines as well. As more European Union countries report March results and the data for U.S. registration comes in, we expect to see similar double-digit YoY declines. With the European war showing no signs of subsiding, April and May comps are looking daunting, and the automotive market may not show positive trends till 2H22, if not 2023. Consequently, we remain cautious on companies with high exposure to the transportations sector, including PPG and AXTA, as well as AVNT, FUL, HXL and perhaps even VVV, as these companies deal with reduced demand from a key end market, while managing the impact of higher raw material, transportation and labor costs on their margins.
Ag-Chem and Ag-Tech
Putting numbers to the war’ impact on ag production. In the previous issues of Mat-Chem Notes, we highlighted the importance of Ukraine as an exporter of grains, oilseed and cereals. Although&nbsp;early plantings in Ukraine&nbsp;appear to be up 10% compared with last year, concerns are growing that&nbsp;2022 plantings&nbsp;will be barely half of last year’s acreage, with predictable results, as the country may be forced to restrict exports of key commodities to ensure its own population is provided for. Given the U.S. Department of Agriculture’s (USDA) revised inflation outlook mentioned previously, these developments don’t bode well for domestic, let alone global, food prices. Outright shortages in import-dependent regions of the world cannot be ruled out.
Domestic aggrege estimates up but may not be enough to address food security concerns. The&nbsp;USDA released its updated planted acreage report, which includes higher than previously expected soybean plantings and lower corn plantings. Overall acreage increased to 317.4 million acres of principal crops, up 1.2 million acres compared with 2021, which marks a rise of 0.4%. The higher soy vs. corn acreage vs. market expectations is a positive for ag-chem companies such as FMC, CTVA and AVD, as soy acres require significantly more pesticides. On the other hand, lower corn acres may be a slight negative for fertilizer companies such as CF Industries (NYSE: CF), Mosaic (NYSE: MOS) and Nutrien (NYSE: NTR), as corn requires significantly higher levels of fertilizers compared with soy and even wheat.
Lowering carbon footprint of renewable fuel. While the practice of adding ethanol to gasoline formulations has been a strong driver of corn demand in the U.S., justified by expectations of reduced carbon emissions by ICE automobiles, ethanol production itself has come under scrutiny regarding its carbon footprint. A&nbsp;new effort underway to address carbon emission&nbsp;concerns includes a proposed CO2&nbsp;pipeline that would capture and transport CO2&nbsp;generated by ethanol plants in the Midwest, making the process of producing transportation-related ethanol a truly carbon-reducing endeavor.
A commodity super cycle?&nbsp;Three developments in domestic ag market&nbsp;may generate a long-term trend of higher demand and higher prices (and higher farm income), building on the strength of the past two years. These include 1) the ongoing Russia-Ukraine war, which may have long-term impact on the production and export of agricultural commodities even after the conflict ends, 2) the growth in demand for green fuels—from ethanol to bio-diesel to renewable diesel, and, 3) the peak inland area that can be brought under cultivation domestically. This suggests that the strong performance of ag suppliers—from seed companies to fertilizer manufacturers to ag-chem formulators—may have a longer runway of above-trend performance than is being currently envisioned by investors, perhaps warranting an upward re-valuation of the trading multiples of the stocks of these companies.
In Other Chemicals and Materials News
M&amp;A activity continues in coatings and adhesives. Having completed its acquisition of a small European powder coatings business,&nbsp;PPG announced&nbsp;last week its divestiture of its African coatings business to Océinde, an industrial group based in Réunion, France. EMN completed the sale of its&nbsp;adhesives resin business Synthomer plc. for $1 billion. SHW also announced the&nbsp;completion of its acquisition&nbsp;of the European industrial coatings business of Sika AG.
Chemical industry doing its part in creating a circular economy. EMN, having&nbsp;announced in January 2022&nbsp;its plan to invest up to $1 billion to build the world's largest material-to-material molecular recycling plant in France, has made further progress and recently announced that it has&nbsp;entered exclusive negotiations&nbsp;with Port-Jerome-sur-Seine authorities in Normandy. Provided the negotiations are successful, Eastman expects the site to be operational by 2025, producing essentially virgin plastic resins from recycled plastic waste. While not a resin producer, AVNT buys significant amount of commodity resins, which it then formulates and compounds with various additives to impart new physical characteristics and create new types of engineered plastic compounds. It is therefore not surprising that the company is keenly interested in playing a role in material stewardship and the circular economy, similar to that of EMN. Recently, AVNT announced an expansion of its recycled content—engineered-plastic compound—offering. This is after it&nbsp;received FDA approval&nbsp;for the use of its thermoplastic elastomer (TPE) resins, which utilize up to 25% of recycled content in certain food-contact applications, offering customers an environmentally friendly choice.
Rating and Price Target Changes
FUL&nbsp;– Deutsche Bank reduced its price target (PT) to $72 from $80, and maintained its Hold rating.
FMC&nbsp;– Monness Crespi downgraded the stock to Neutral from Buy.
PPG&nbsp;– BofA lowered its PT to $168 from $186, and reiterated its Buy recommendation; RBC also lowered its PT to $158 from $169, while reiterating its Outperform rating.
IOSP&nbsp;– Seaport Global initiated coverage with a Neutral rating.
SHW&nbsp;– Evercore ISI raised its PT to $320 from $300, and reiterated its Outperform 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 3, 2022