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;Last week saw the stock market lose most of the gains of the previous two weeks, with the Russell 2000 dropping 4.4% and the S&amp;P 500 losing 5.1%, flirting with a technical bear market territory. Our WTR-CMI index of 30 chemicals and materials technology companies trailed both broader indexes, losing 5.9% last week.</li>
<li>Winners and losers.&nbsp;Only one of our stocks—PKE—posted a positive return last week, as the stock continues to benefit from improving investor sentiment toward the aerospace industry. Strong demand necessitating capacity expansion was likely the driver behind NGVT’s relative outperformance, as the stock declined 2.5%. Similarly, HXL’s loss of 3.7% made the stock a relative outperformer, driven by similar improvements in investor sentiment toward the aerospace industry reflected in PKE’s performance.</li>
<li>Lack of chips still an issue for automotive markets.&nbsp;Even as the worst of the&nbsp;chip crunch may be behind, owing to a drop in consumer electronics demand as inflation and potential recession fears hold down consumer spending, the expected&nbsp;production losses due to the shortage&nbsp;are now expected to exceed 2 million vehicles worldwide. Furthermore, the underlying issues with chip availability may need to be addressed on a more fundamental level, than hoping competition from consumer electronics subsides, which may require changes in how&nbsp;the auto industry deals with its semiconductor suppliers, as well as with internal design decisions.</li>
<li>EU’s sticking to its guns on ICE phaseout.&nbsp;Hopes that EU may ease up on its 2035 goals for an ICE vehicle production hard stop faded as the Union’s Parliament&nbsp;voted to keep the ban in place. The decision may be seen as a victory for EV battery ecosystem and related industries, but a disappointment for renewable fuel industry and a concern for&nbsp;auto manufacturers and other industry groups&nbsp;who see the timetable as too aggressive and disruptive.</li>
<li>Domestic graphite production gets one step closer.&nbsp;Westwater Resources, Inc. (NYSE: WWR) announced the&nbsp;receipt of an air permit&nbsp;from the Alabama Department of Environmental Management, an important step in constructing a graphite processing plant in Alabama.</li>
</ul>
<h3>WTR-CMI WEEKLY PERFORMANCE</h3>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/281/375/original/image_97929112221655423221717.png?1655423224" class="editor-image img-responsive" data-smartkarma-image-id="281375"></figure>
<p>Source: YCharts; June 10 close</p>
<h2>Automotive &amp; Transportation Market</h2>
<p>Passenger vehicle markets decline shows no signs of reversing.&nbsp;As May new car registrations data continues to come in, results remain uniformly disappointing. Although better than the 19% drop predicted earlier in the month, China’s sales declined&nbsp;17% Y/Y (or maybe 13%), depending on who you believe).&nbsp;UK sales of new passenger vehicles&nbsp;tumbled 21% Y/Y in May, although HEV and BEV sales rose in the mid-teens compared with the year-ago period.&nbsp;Sales in Germany&nbsp;also declined, albeit at a more modest 10% level, while order backlog reached an all-time high, suggesting pent-up demand may push sales higher over the next two to four months, as shortages of chips and other critical components ease and assuming higher prices and fears of recession do not overwhelm consumers. In Russia, the price of war with Ukraine now includes an&nbsp;84% drop in new car sales in May&nbsp;in that country, as foreign companies abandon the market and wind down their operations and stock in the region. As a result of its growing isolation, Russian new car sales are&nbsp;expected to decline 51% in 2022&nbsp;versus 2021 levels. While not as dramatic,&nbsp;LMC Automotive expects European new car sales&nbsp;to decline to below 10 million units in 2022, which would put it down 7.4% Y/Y and would be off 22.5% compared with 2020.</p>
<p>Although May 2022 represents the last difficult Y/Y comp of 2022, going against high double-digit growth a year ago, the pessimism implied by Russian and European full-year forecasts suggests the automotive industry is not out of the woods yet. The negative impact of semiconductor shortages may be easing, only to be replaced by consumer angst over skyrocketing prices and concerns of a global recession. Caution being the better part of valor, we would remain cautious on suppliers into the automotive industry in our sector, such as PPG and AXTA, who are already dealing with margin compression as a result of rapidly escalating raw material costs and may continue to face volume growth challenges as their main end-markets—automotive OEM and collision repair—continue to remain under pressure; with there being a close correlation between gasoline prices and miles driven and between the latter and collisions. Other companies that face similar auto/gasoline-related headwinds include VVV and NewMarket (NYSE: NEU).</p>
<h2>EVs &amp; Battery Ecosystem</h2>
<p>A step forward for battery technology.&nbsp;Colorado-based Solid Power Inc. (NASDAQ: SLDP) looks to ship its first&nbsp;solid state pre-production battery cells&nbsp;to BMW and Ford by year-end 2022. These cells will be produced at the company’s pilot plant facility for validation testing by its automotive partners. The&nbsp;pilot plant&nbsp;will have the capacity to produce 300 cells/week, or about 15,000/year, enough to continue to supply validation trials with SLDP’s existing and potential future partners. The company is also looking for a manufacturer to ramp up commercial production of battery cells using the company’s proprietary sulfide-based solid electrolyte material, with intentions to ramp up commercial scale production in 2026.</p>
<p>Battery technology players continue to team up.&nbsp;Li-Cycle Holdings Corp. (NYSE: LICY), a lithium-ion battery recycler in North America, has established&nbsp;long-term commercial agreements&nbsp;with Swiss provider of primary metals for the production of EV batteries, Glencore, with the latter also completing its previously announced $200 million investment in LICY. Li-Cycle says it also has appointed Kunal Sinha, Glencore’s head of recycling, to Li-Cycle’s board of directors. Meanwhile, lithium battery manufacturer LG Chem formed a&nbsp;joint venture with B&amp;M, a subsidiary of the Chinese company Huayou Cobalt, to produce cathode materials and another&nbsp;JV with Kemco&nbsp;to manufacture precursors for cathodes.</p>
<p>Disjointed government regulatory policies working at cross purposes to announced goals.&nbsp;Governments across the globe, including the US, are setting ambitious (some would say unachievable) goals for cutting transportation-associated carbon emissions, settling on lithium battery-based EVs as the preferred method to achieve their targets. Unfortunately, it is also governments that are putting obstacles in front of companies trying to develop sufficient supply infrastructure of critical materials to meet the expected needs of the EV industry; from restrictive water permits and outright threat of nationalization of lithium assets in Chile and Argentina, to environmental groups’ lawsuits seeking to stop development of lithium mines in North America, to the drive to classify lithium derivatives as dangerous for human health, implying a more restrictive regulatory framework for their use in Europe. Should the latter come to pass, ALB, the world’s largest producer of lithium-based chemicals for the EV battery industry, may be looking to terminate its&nbsp;lithium production in Germany, just as the region is expecting a steep ramp-up in EV production and sales. This would be likely result in lithium production being moved out of EU states, requiring the region to import the material, extending the supply chain and leaving the Union vulnerable to geopolitical and logistical disruptions.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Farmers feeling the cost bite.&nbsp;Purdue University and CME group’s Ag Economy Barometer&nbsp;took a tumble in May, coming in at 99, the lowest reading since April 2020 and only the ninth time since 2015 the monthly score fell below 100. The culprit of deteriorating sentiment is, no surprise, elevated production costs; everything from farmland rents to gasoline and diesel to fertilizers and crop chemicals. With most costs already sunk in, as&nbsp;plantings of corn and soybean have finally caught up to five-year averages&nbsp;and crop conditions looking mostly solid, a lot of the pain farmers are feeling may be behind. Post-emergent rescue ag products, such as insecticide and fungicides still possibly left to be purchased, fuel costs will continue to be a problem through harvest and grain drying, as well as delivery, all of which rely on energy whose costs are likely to continue to increase. The one positive remaining is the high global commodity grain prices, which may be sustainable given the disruptions to the supply chain caused by Russia’s invasion of Ukraine. In fact,&nbsp;wheat supplies may be particularly at risk, a situation that may affect the global economies and societies in ways that are difficult to predict at this time, but that are likely to result in sustained high ag commodity prices at least through 2023-24.</p>
<p>Bio-based alternatives may become critical.&nbsp;Given the above, and with fertilizer prices already falling from their panic buying peaks, US farmers may find themselves in a slightly worse cash income position at the end of this season compared with 2021, but in a position to benefit from declining input costs and still high crop prices in 2023. Such an environment would be a positive for crop chemical suppliers like FMC, CTV and AVD, as well as provide momentum for further penetration of drought resistant seeds, like the HB-4 wheat and soybeans developed and marketed by BIOX and bio-based crop protection, soil health and bio-nutrient companies, such as MBII (which is soon to merge with BIX). A rationalization and harmonization of regulatory requirements to get&nbsp;genetically modified seeds into farmers’ hands&nbsp;in a timely manner and at more affordable prices may be needed and that is something government agencies may be in the position to do, as their efforts in all other areas of inflation fighting and food security remain largely ineffective.</p>
<h2>In Other News</h2>
<p>Adhesives’ growth to continue and perhaps accelerate.&nbsp;The adhesives &amp; sealants market has grown at above-GDP rates historically, driven in large part by continuing substitution of adhesives in place of mechanical or welded joints, allowing the industry to outgrow its end-markets as a result. This trend is expected to continue, with the&nbsp;market for structural adhesives&nbsp;projected to grow at a 6.9% CAGR (2021-2030) to reach a value of $27.9 billion worldwide by 2030. The industry also continues to&nbsp;spend heavily on R&amp;D&nbsp;to ensure its products not only meet current and expected future needs of its end-customers, but do so while minimizing the environmental impact of adhesives production and enabling is customers to reach their respective ESG goals as well.</p>
<p>While higher raw material costs and possible slowdown of the global economy as a result of sanctions against Russia, inflation, and central banks’ efforts to combat it are a concern, secular drivers, such as increased use of adhesives in place of mechanical joining, may allow companies such as FUL, RPM and NGVT to outperform their peers in chemicals and materials sector.</p>
<p>Coatings market consolidation.&nbsp;Last week PPG held its annual&nbsp;investor day&nbsp;in Helsinki, Finland, during which the company highlighted its recently completed acquisition of Tikkurila, a leading European paints &amp; coatings company. Meanwhile, PPG’s peer—Sherwin Williams—announced an&nbsp;agreement to acquire Gross &amp; Perthun GmbH, a developer, manufacturer, and distributor of coatings primarily for the heavy equipment and transportation industries with approximately $50 million in annual sales, bolstering SHW’s industrial and transportation coatings business in Europe. The deal is expected to close by the end of 3Q22.</p>
<h2>Recent WTR Publications and Upcoming Events:</h2>
<p>Management Series Report – Marrone Bio Innovations CEO Kevin Helash</p>
<p>Westwater Resources, Inc. (NYSE: WWR) Fireside Chat</p>
<h2>Rating and Price Target Changes</h2>
<p>EAF –&nbsp;Citigroup downgraded the stock to Neutral from Buy, with a price target (PT) set at $10.</p>
<p>ECL –&nbsp;Deutsche Bank lowered its PT to $195 from $200 but reiterated its Buy recommendation.</p>
<p>SHW –&nbsp;Evercore ISI lowered its PT to $305 from $310 but reiterated its Outperform 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;Last week saw the stock market lose most of the gains of the previous two weeks, with the Russell 2000 dropping 4.4% and the S&amp;P 500 losing 5.1%, flirting with a technical bear market territory. Our WTR-CMI index of 30 chemicals and materials technology companies trailed both broader indexes, losing 5.9% last week.
Winners and losers.&nbsp;Only one of our stocks—PKE—posted a positive return last week, as the stock continues to benefit from improving investor sentiment toward the aerospace industry. Strong demand necessitating capacity expansion was likely the driver behind NGVT’s relative outperformance, as the stock declined 2.5%. Similarly, HXL’s loss of 3.7% made the stock a relative outperformer, driven by similar improvements in investor sentiment toward the aerospace industry reflected in PKE’s performance.
Lack of chips still an issue for automotive markets.&nbsp;Even as the worst of the&nbsp;chip crunch may be behind, owing to a drop in consumer electronics demand as inflation and potential recession fears hold down consumer spending, the expected&nbsp;production losses due to the shortage&nbsp;are now expected to exceed 2 million vehicles worldwide. Furthermore, the underlying issues with chip availability may need to be addressed on a more fundamental level, than hoping competition from consumer electronics subsides, which may require changes in how&nbsp;the auto industry deals with its semiconductor suppliers, as well as with internal design decisions.
EU’s sticking to its guns on ICE phaseout.&nbsp;Hopes that EU may ease up on its 2035 goals for an ICE vehicle production hard stop faded as the Union’s Parliament&nbsp;voted to keep the ban in place. The decision may be seen as a victory for EV battery ecosystem and related industries, but a disappointment for renewable fuel industry and a concern for&nbsp;auto manufacturers and other industry groups&nbsp;who see the timetable as too aggressive and disruptive.
Domestic graphite production gets one step closer.&nbsp;Westwater Resources, Inc. (NYSE: WWR) announced the&nbsp;receipt of an air permit&nbsp;from the Alabama Department of Environmental Management, an important step in constructing a graphite processing plant in Alabama.

WTR-CMI WEEKLY PERFORMANCE

Source: YCharts; June 10 close
Automotive &amp; Transportation Market
Passenger vehicle markets decline shows no signs of reversing.&nbsp;As May new car registrations data continues to come in, results remain uniformly disappointing. Although better than the 19% drop predicted earlier in the month, China’s sales declined&nbsp;17% Y/Y (or maybe 13%), depending on who you believe).&nbsp;UK sales of new passenger vehicles&nbsp;tumbled 21% Y/Y in May, although HEV and BEV sales rose in the mid-teens compared with the year-ago period.&nbsp;Sales in Germany&nbsp;also declined, albeit at a more modest 10% level, while order backlog reached an all-time high, suggesting pent-up demand may push sales higher over the next two to four months, as shortages of chips and other critical components ease and assuming higher prices and fears of recession do not overwhelm consumers. In Russia, the price of war with Ukraine now includes an&nbsp;84% drop in new car sales in May&nbsp;in that country, as foreign companies abandon the market and wind down their operations and stock in the region. As a result of its growing isolation, Russian new car sales are&nbsp;expected to decline 51% in 2022&nbsp;versus 2021 levels. While not as dramatic,&nbsp;LMC Automotive expects European new car sales&nbsp;to decline to below 10 million units in 2022, which would put it down 7.4% Y/Y and would be off 22.5% compared with 2020.
Although May 2022 represents the last difficult Y/Y comp of 2022, going against high double-digit growth a year ago, the pessimism implied by Russian and European full-year forecasts suggests the automotive industry is not out of the woods yet. The negative impact of semiconductor shortages may be easing, only to be replaced by consumer angst over skyrocketing prices and concerns of a global recession. Caution being the better part of valor, we would remain cautious on suppliers into the automotive industry in our sector, such as PPG and AXTA, who are already dealing with margin compression as a result of rapidly escalating raw material costs and may continue to face volume growth challenges as their main end-markets—automotive OEM and collision repair—continue to remain under pressure; with there being a close correlation between gasoline prices and miles driven and between the latter and collisions. Other companies that face similar auto/gasoline-related headwinds include VVV and NewMarket (NYSE: NEU).
EVs &amp; Battery Ecosystem
A step forward for battery technology.&nbsp;Colorado-based Solid Power Inc. (NASDAQ: SLDP) looks to ship its first&nbsp;solid state pre-production battery cells&nbsp;to BMW and Ford by year-end 2022. These cells will be produced at the company’s pilot plant facility for validation testing by its automotive partners. The&nbsp;pilot plant&nbsp;will have the capacity to produce 300 cells/week, or about 15,000/year, enough to continue to supply validation trials with SLDP’s existing and potential future partners. The company is also looking for a manufacturer to ramp up commercial production of battery cells using the company’s proprietary sulfide-based solid electrolyte material, with intentions to ramp up commercial scale production in 2026.
Battery technology players continue to team up.&nbsp;Li-Cycle Holdings Corp. (NYSE: LICY), a lithium-ion battery recycler in North America, has established&nbsp;long-term commercial agreements&nbsp;with Swiss provider of primary metals for the production of EV batteries, Glencore, with the latter also completing its previously announced $200 million investment in LICY. Li-Cycle says it also has appointed Kunal Sinha, Glencore’s head of recycling, to Li-Cycle’s board of directors. Meanwhile, lithium battery manufacturer LG Chem formed a&nbsp;joint venture with B&amp;M, a subsidiary of the Chinese company Huayou Cobalt, to produce cathode materials and another&nbsp;JV with Kemco&nbsp;to manufacture precursors for cathodes.
Disjointed government regulatory policies working at cross purposes to announced goals.&nbsp;Governments across the globe, including the US, are setting ambitious (some would say unachievable) goals for cutting transportation-associated carbon emissions, settling on lithium battery-based EVs as the preferred method to achieve their targets. Unfortunately, it is also governments that are putting obstacles in front of companies trying to develop sufficient supply infrastructure of critical materials to meet the expected needs of the EV industry; from restrictive water permits and outright threat of nationalization of lithium assets in Chile and Argentina, to environmental groups’ lawsuits seeking to stop development of lithium mines in North America, to the drive to classify lithium derivatives as dangerous for human health, implying a more restrictive regulatory framework for their use in Europe. Should the latter come to pass, ALB, the world’s largest producer of lithium-based chemicals for the EV battery industry, may be looking to terminate its&nbsp;lithium production in Germany, just as the region is expecting a steep ramp-up in EV production and sales. This would be likely result in lithium production being moved out of EU states, requiring the region to import the material, extending the supply chain and leaving the Union vulnerable to geopolitical and logistical disruptions.
Ag-Chem and Ag-Tech
Farmers feeling the cost bite.&nbsp;Purdue University and CME group’s Ag Economy Barometer&nbsp;took a tumble in May, coming in at 99, the lowest reading since April 2020 and only the ninth time since 2015 the monthly score fell below 100. The culprit of deteriorating sentiment is, no surprise, elevated production costs; everything from farmland rents to gasoline and diesel to fertilizers and crop chemicals. With most costs already sunk in, as&nbsp;plantings of corn and soybean have finally caught up to five-year averages&nbsp;and crop conditions looking mostly solid, a lot of the pain farmers are feeling may be behind. Post-emergent rescue ag products, such as insecticide and fungicides still possibly left to be purchased, fuel costs will continue to be a problem through harvest and grain drying, as well as delivery, all of which rely on energy whose costs are likely to continue to increase. The one positive remaining is the high global commodity grain prices, which may be sustainable given the disruptions to the supply chain caused by Russia’s invasion of Ukraine. In fact,&nbsp;wheat supplies may be particularly at risk, a situation that may affect the global economies and societies in ways that are difficult to predict at this time, but that are likely to result in sustained high ag commodity prices at least through 2023-24.
Bio-based alternatives may become critical.&nbsp;Given the above, and with fertilizer prices already falling from their panic buying peaks, US farmers may find themselves in a slightly worse cash income position at the end of this season compared with 2021, but in a position to benefit from declining input costs and still high crop prices in 2023. Such an environment would be a positive for crop chemical suppliers like FMC, CTV and AVD, as well as provide momentum for further penetration of drought resistant seeds, like the HB-4 wheat and soybeans developed and marketed by BIOX and bio-based crop protection, soil health and bio-nutrient companies, such as MBII (which is soon to merge with BIX). A rationalization and harmonization of regulatory requirements to get&nbsp;genetically modified seeds into farmers’ hands&nbsp;in a timely manner and at more affordable prices may be needed and that is something government agencies may be in the position to do, as their efforts in all other areas of inflation fighting and food security remain largely ineffective.
In Other News
Adhesives’ growth to continue and perhaps accelerate.&nbsp;The adhesives &amp; sealants market has grown at above-GDP rates historically, driven in large part by continuing substitution of adhesives in place of mechanical or welded joints, allowing the industry to outgrow its end-markets as a result. This trend is expected to continue, with the&nbsp;market for structural adhesives&nbsp;projected to grow at a 6.9% CAGR (2021-2030) to reach a value of $27.9 billion worldwide by 2030. The industry also continues to&nbsp;spend heavily on R&amp;D&nbsp;to ensure its products not only meet current and expected future needs of its end-customers, but do so while minimizing the environmental impact of adhesives production and enabling is customers to reach their respective ESG goals as well.
While higher raw material costs and possible slowdown of the global economy as a result of sanctions against Russia, inflation, and central banks’ efforts to combat it are a concern, secular drivers, such as increased use of adhesives in place of mechanical joining, may allow companies such as FUL, RPM and NGVT to outperform their peers in chemicals and materials sector.
Coatings market consolidation.&nbsp;Last week PPG held its annual&nbsp;investor day&nbsp;in Helsinki, Finland, during which the company highlighted its recently completed acquisition of Tikkurila, a leading European paints &amp; coatings company. Meanwhile, PPG’s peer—Sherwin Williams—announced an&nbsp;agreement to acquire Gross &amp; Perthun GmbH, a developer, manufacturer, and distributor of coatings primarily for the heavy equipment and transportation industries with approximately $50 million in annual sales, bolstering SHW’s industrial and transportation coatings business in Europe. The deal is expected to close by the end of 3Q22.
Recent WTR Publications and Upcoming Events:
Management Series Report – Marrone Bio Innovations CEO Kevin Helash
Westwater Resources, Inc. (NYSE: WWR) Fireside Chat
Rating and Price Target Changes
EAF –&nbsp;Citigroup downgraded the stock to Neutral from Buy, with a price target (PT) set at $10.
ECL –&nbsp;Deutsche Bank lowered its PT to $195 from $200 but reiterated its Buy recommendation.
SHW –&nbsp;Evercore ISI lowered its PT to $305 from $310 but 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 June 12, 2022