) to buy from hold.
Analyst Saul Ludwig says he upgrades as he believes the risk/reward balance on Lubrizol has finally tilted in a more positive direction, which is reflected in higher earnings per share expectations for the company in 2005 and 2006.
Specifically, he believes the CEO Hambrick has ignited the management team to take a much more aggressive stance in terms of pricing, marketing, and cost reduction across the company.
Hambrick says those actions, when combined with modestly higher volume expectations in lubricant additives business, supports his higher earnings per share expectations. He raises his $2.85 2005 earnings per share estimate to $2.95, and his $3.10 2006 earnings per share estimate to $3.20. He sets a $48 target.