Shares of W.R. Grace & Co. hit an all-time high Thursday, a day after an analyst said that the specialty chemicals and materials company is building up its businesses as it prepares to emerge from bankruptcy protection.
THE OPINION: Piper Jaffray & Co. analyst Mike J. Ritzenthaler initiated coverage on W.R. Grace with a rating of overweight and a share price target of $70.
The Columbia, Md., company is expected to emerge from bankruptcy protection sometime in the fourth quarter of 2013, pending the outcome of court appeals.
W.R. Grace has outlined goals for 2014, including $850 million of earnings before interest, taxes, depreciation and amortization, the analyst stated.
The targets "appear to be very achievable," Ritzenthaler wrote in a research note published Wednesday.
W.R. Grace should be able to capitalize on new technologies used by oil refiners that produce oil-based products and fuels, which should help it expand margins, he said.
THE BACKGROUND: W.R. Grace filed to reorganize under Chapter 11 bankruptcy protection in 2001. Executives at the time decided to file without wiping out the equity value as they worked to resolve asbestos-related liabilities, the analyst said.
In June a bankruptcy court reaffirmed W.R. Grace's reorganization plan but pending court appeals have delayed its exit from bankruptcy. Those claims should be resolved to allow W.R. Grace to emerge from bankruptcy in the fourth quarter of 2013, Ritzenthaler said.
THE STOCK: Shares of W.R. Grace rose $2.77, or 4.7 percent, to close at $61.61. Earlier in the session, the stock hit an all-time high of $61.99 per share.