Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from 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.

Equity Research Firm

Thematic (Sector/Industry)

<h3>KEY HIGHLIGHTS</h3>
<div></div>
<ul>
<li>WTR-CMI last week.&nbsp;While both broad market indexes declined last week, with the S&amp;P 500 and the Russell 2000 down 0.9% and 1.4%, respectively, our WTR-CMI index of 30 chemicals and materials technology stocks underperformed on a relative basis, declining 1.5%. BofA’s downgrade didn’t prevent SHW from appreciating 3.1%, followed by RPM’s 3.0% and AVNT’s 2.8% improvement, as consumer spending remained strong. Volatile lithium stocks contributed to our index’s decline, with PLL’s 11% drop continuing the erosion of that stock on lack of rezoning and permitting progress at its North Carolina plant/mine. LTHM saw its stock drop 9% and EAF delivered a 7.7% decline, likely on reports of&nbsp;weaker Y/Y steel production volumes.</li>
<li>Ag economy is doing its part for the environment.&nbsp;A new&nbsp;report by the USDA indicates&nbsp;the US farm economy reduced its carbon footprint from 699M mt of CO2&nbsp;in 2019 to 670M mt in 2020. With growing use of blue and green ammonia lowering the fertilizer industry’s contribution to CO2&nbsp;generation and with greater use of bio-based pesticides, the carbon footprint of the industry should continue to trend down, helping the US meet the administration’s carbon emissions 2030 goal.</li>
<li>Automotive market may be bottoming.&nbsp;June new car registrations&nbsp;fell 14% in the EU, but increased&nbsp;24% Y/Y in China, after that country’s easing of COVID lockdowns and an infusion of consumer incentives. However, industry participants don’t see the market recovering until 2024, as indicated by the Chinese market’s downward revision for 2022 growth from 5.4% to 3%, although there is growing optimism that 2H22 will be better than the previous six months. With PPG and AXTA well off their end of 2021 highs, prospects of stabilization in auto production may be seen as good news.</li>
<li>EV market struggles with battery materials.&nbsp;As the EV revolution continues, with&nbsp;China’s NEV market up 123% YTD, securing sufficient battery materials to ensure continued growth of the EV industry is still a major concern. Current geopolitics are only adding fuel to the fire, with reduced supply of nickel and other critical metals from Russia. While graphite did not make the&nbsp;list of concerns, it is this material, largely underappreciated by the investors, that may provide the best investment vehicle and we encourage investors to explore WWR, as well as its NA graphite development peers.</li>
</ul>
<h3>WTR-CMI WEEKLY PERFORMANCE</h3>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/287/434/original/image_14966178821658361148932.png?1658361153" class="editor-image img-responsive" data-smartkarma-image-id="287434"></figure>
<h2>Automotive &amp; Transportation Market</h2>
<p>Chipping away at semiconductor shortages.&nbsp;Last week,&nbsp;AFS estimated that more than 167,000 vehicles&nbsp;were scratched from production globally due to semiconductor shortages, mostly in Asian plants outside of China. This comes on top of the 220,000 vehicles lost due to chip shortfalls the previous week, mostly from European production. As the hopes for a quick resolution to the chip shortage crisis fade, industry participants are learning the lessons from this debacle and investing in dedicated automotive semiconductor capacity, including&nbsp;Bosch’s latest announcement of a $3 billion investment&nbsp;in chip production, including in Germany, to expand supply and shorten the supply chain in an effort to prevent similar shortages from affecting the industry in the future. Unfortunately, while these investments are scheduled to take place through 2026, near-term chip availability may remain an issue in holding back new car production and affecting major auto suppliers in our WTR-CMI index, such as PPG and AXTA.</p>
<h2>EVs &amp; Battery Ecosystem</h2>
<p>New battery plant and battery materials supply.&nbsp;Panasonic edged a step closer&nbsp;to setting up a new battery cell factory in Kansas to supply Tesla and others, expanding EV production in the US. Looking to expand the source of critical materials for battery manufacturing in North America,&nbsp;VW entered into a wide-ranging collaboration with recycling start-up Redwood Materials, whereby Redwood would work directly with VW dealers in North America to collect and recycle end-of-life EV batteries in order to extract critical metals such as copper, cobalt, lithium, and nickel for use in building new batteries built by domestic battery manufacturers. Meanwhile,&nbsp;Belgian Umicore (OTC: UMICY) is looking to build its first factory&nbsp;in North America (having picked Canada) for the production of battery-grade cathode materials, with construction scheduled to begin in 2023 and production to come online by the end of 2025, with capacity to provide for about 1 million EVs annually.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Soybean expectations lowered.&nbsp;The USDA’s&nbsp;World Agricultural Supply and Demand Estimates (WASDE) for July 2022&nbsp;showed no change in corn estimates, but included a reduction in soybean planted acres and therefore exports. With weather being the key focus for corn and soybean crop over the next two to four weeks, yield estimates, which were left largely unchanged, may have to be reduced, signaling that higher crop prices may remain, which may help farmers offset higher input costs and lower bushels to still generate acceptable, albeit likely lower than last year’s cash income by the end of this ag season.&nbsp;The USDA report also included raised expectations for LATAM production and higher wheat plantings and production in the US, as we mentioned last week. Most intriguing, the report includes estimates of significantly lower cotton planting and production in the US this year, driven by drought conditions across the southern plains.</p>
<p>Governments continue to tighten the regulatory noose.&nbsp;While the world is in the midst of dealing with what could turn out to be one of the worst food security issues in a generation or more, due to the conflict in Ukraine,&nbsp;the Dutch government voted last month on proposals to slash emissions of damaging pollutants, a plan that will likely force farmers in the country to cut their livestock herds or stop work altogether. The government says emissions of nitrogen oxide and ammonia, which livestock produce, must be drastically reduced to meet its and the EU’s climate goals.&nbsp;Dutch farmers have been demonstrating in cities and towns across the country&nbsp;to protest the government decision that, in farmers’ views, callously sacrifices the country’s farm industry on the altar of climate change. While one may debate the merits of government policies in normal times, enforcing these new laws during times of real geopolitical and economic crises appears questionable. On a related note, Brazil continues to actively work to lower or eliminate the use dangerous chemicals-based ag input products in the country. The government’s latest move is to suspend the import, production, distribution, and commercialization of the active ingredient&nbsp;Carbendazim and its technical products. Carbendazim is a leading broad spectrum fungicide used by itself or in combination with other active ingredients. Among the companies in our WTR-CMCCI index, FMC appears most at risk, should the government decide to permanently ban or restrict the use of the fungicide in the country. On the other hand, bio-based fungicides, such as those being manufactured by Marrone Bio, which is soon to merge with Bioceres (NASDAQ: BIOX), may get a boost from these actions, as they provide a viable alternative to chem-based fungicides.</p>
<h2>Chemicals and Materials News</h2>
<p>Looking to benefit from growth in e-commerce.&nbsp;FUL recently announced it has&nbsp;entered a strategic partnership&nbsp;in North America with Enimac, an international tape application equipment manufacturer that serves more than 100 customers in more than 30 countries. The two companies will collaborate on the development of pressure-sensitive adhesives and tape dispensing equipment to help FUL gain additional share in the packaging market, whose growth is increasingly driven by e-commerce applications. While this may not be a game changer for FUL, the partnership should allow the company to accelerate its growth in an important packaging market, potentially helping to offset an expected slowdown in construction and assembly adhesives areas.</p>
<p>Commodity prices ease, but downstream derivatives still headed higher.&nbsp;Both polyethylene (PE) and polypropylene (PP)&nbsp;resin prices declined $0.02/lb. and $0.03/lb., respectively, last week. With slowing economic conditions and easing crude oil and gas prices, commodity resin prices may continue their decline off recent highs in the weeks and months ahead. This would be a positive for AVNT, which purchases significant quantities of commodity resins before converting them to specialty and engineered plastic compounds and we may see the company’s margins begin to improve sequentially in 2H22, although Y/Y comps are likely to remain challenging into 2023. However, prices of pet-chem derivatives, such as coatings, adhesives and composites resins, are still going up, as companies attempt to restore their margins following the sharp run-up in raw material costs, including basic polymers and resins over the past 12 months. Thus,&nbsp;Wacker is increasing prices&nbsp;for dispersions, resins, and dispersible polymer powders sourced from its production sites in Europe by up to 10%. Nevertheless, intermediate suppliers such as Wacker may have the toughest time restoring their margins, given that their raw materials are commodities highly correlated with oil and gas prices, while their products are sold in a highly competitive market that limits the ability to raise prices fast enough to offset raw material inflation. In our WTR-CMI index, EMN, KOP, and KWR may be most exposed to this margin compression trend, and we remain cautious of these companies’ abilities to deliver 2022 results that would positively surprise versus current expectations.</p>
<h2>Rating and Price Target Changes</h2>
<p>ALB –&nbsp;UBS lowered its price target (PT) to $218 from $260 and maintained its Neutral rating.</p>
<p>AXTA –&nbsp;UBS lowered its PT to $30 from $33 and reiterated its Buy rating; Mizuho Securities lowered its PT to $31 from $34 and reiterated its Buy rating.</p>
<p>CTVA –&nbsp;UBS lowered its PT to $64 from $68 and reiterated its Buy rating; Credit Suisse initiated coverage with an Outperform rating and $68 PT.</p>
<p>EAF –&nbsp;RBC downgraded the stock to Sector Perform from Outperform and lowered its PT to $7 from $10.</p>
<p>ECL&nbsp;– BofA downgraded the stock to Neutral from Buy and lowered its PT to $183 from $193; Wells Fargo initiated on the stock with Overweight and $187 PT; RBC lowered its PT to $190 from $225 and maintained its Sector Perform rating.</p>
<p>EMN –&nbsp;RBC lowered its PT to $94 from $109 and maintained its Sector Perform rating; UBS lowered its PT from $142 to $121 but reiterated its Buy rating; BofA lowered its PT to $115 from $123 and maintained its Neutral rating.</p>
<p>FMC –&nbsp;UBS lowered its PT to $140 from $149 and reiterated its Buy rating.</p>
<p>RPM –&nbsp;BofA lowered its PT to $78 from $90 and reiterated its Underperform rating; UBS lowered its PT from $106 to $96 and reiterated its Buy rating.</p>
<p>PPG –&nbsp;UBS lowered its PT to $161 from $177 and reiterated its Buy rating; BofA lowered its PT to $161 from $172 and reiterated its Buy rating; Mizuho Securities lowered its PT to $162 from $169 and reiterated its Buy rating.</p>
<p>SHW –&nbsp;Northcoast Research reinstated coverage with a Buy rating and $300 PT; BofA downgraded the stock to Neutral from Buy and lowered its PT to $292 from $313; Mizuho Securities lowered its PT to $294 from $310 and reiterated its Buy rating.</p>
<h2>Recent WTR Publications and Upcoming Events</h2>
<p>Management Series Report – Marrone Bio Innovations CEO Kevin Helash</p>
<p>Management Series Report – Westwater Resources Executive Chairman Terence Cryan and CAO Steven Cates</p>
<p>Initiation of Coverage – Westwater Resources, Inc.</p>
<h3>DISCLOSURES</h3>
<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;While both broad market indexes declined last week, with the S&amp;P 500 and the Russell 2000 down 0.9% and 1.4%, respectively, our WTR-CMI index of 30 chemicals and materials technology stocks underperformed on a relative basis, declining 1.5%. BofA’s downgrade didn’t prevent SHW from appreciating 3.1%, followed by RPM’s 3.0% and AVNT’s 2.8% improvement, as consumer spending remained strong. Volatile lithium stocks contributed to our index’s decline, with PLL’s 11% drop continuing the erosion of that stock on lack of rezoning and permitting progress at its North Carolina plant/mine. LTHM saw its stock drop 9% and EAF delivered a 7.7% decline, likely on reports of&nbsp;weaker Y/Y steel production volumes.
Ag economy is doing its part for the environment.&nbsp;A new&nbsp;report by the USDA indicates&nbsp;the US farm economy reduced its carbon footprint from 699M mt of CO2&nbsp;in 2019 to 670M mt in 2020. With growing use of blue and green ammonia lowering the fertilizer industry’s contribution to CO2&nbsp;generation and with greater use of bio-based pesticides, the carbon footprint of the industry should continue to trend down, helping the US meet the administration’s carbon emissions 2030 goal.
Automotive market may be bottoming.&nbsp;June new car registrations&nbsp;fell 14% in the EU, but increased&nbsp;24% Y/Y in China, after that country’s easing of COVID lockdowns and an infusion of consumer incentives. However, industry participants don’t see the market recovering until 2024, as indicated by the Chinese market’s downward revision for 2022 growth from 5.4% to 3%, although there is growing optimism that 2H22 will be better than the previous six months. With PPG and AXTA well off their end of 2021 highs, prospects of stabilization in auto production may be seen as good news.
EV market struggles with battery materials.&nbsp;As the EV revolution continues, with&nbsp;China’s NEV market up 123% YTD, securing sufficient battery materials to ensure continued growth of the EV industry is still a major concern. Current geopolitics are only adding fuel to the fire, with reduced supply of nickel and other critical metals from Russia. While graphite did not make the&nbsp;list of concerns, it is this material, largely underappreciated by the investors, that may provide the best investment vehicle and we encourage investors to explore WWR, as well as its NA graphite development peers.

WTR-CMI WEEKLY PERFORMANCE

Automotive &amp; Transportation Market
Chipping away at semiconductor shortages.&nbsp;Last week,&nbsp;AFS estimated that more than 167,000 vehicles&nbsp;were scratched from production globally due to semiconductor shortages, mostly in Asian plants outside of China. This comes on top of the 220,000 vehicles lost due to chip shortfalls the previous week, mostly from European production. As the hopes for a quick resolution to the chip shortage crisis fade, industry participants are learning the lessons from this debacle and investing in dedicated automotive semiconductor capacity, including&nbsp;Bosch’s latest announcement of a $3 billion investment&nbsp;in chip production, including in Germany, to expand supply and shorten the supply chain in an effort to prevent similar shortages from affecting the industry in the future. Unfortunately, while these investments are scheduled to take place through 2026, near-term chip availability may remain an issue in holding back new car production and affecting major auto suppliers in our WTR-CMI index, such as PPG and AXTA.
EVs &amp; Battery Ecosystem
New battery plant and battery materials supply.&nbsp;Panasonic edged a step closer&nbsp;to setting up a new battery cell factory in Kansas to supply Tesla and others, expanding EV production in the US. Looking to expand the source of critical materials for battery manufacturing in North America,&nbsp;VW entered into a wide-ranging collaboration with recycling start-up Redwood Materials, whereby Redwood would work directly with VW dealers in North America to collect and recycle end-of-life EV batteries in order to extract critical metals such as copper, cobalt, lithium, and nickel for use in building new batteries built by domestic battery manufacturers. Meanwhile,&nbsp;Belgian Umicore (OTC: UMICY) is looking to build its first factory&nbsp;in North America (having picked Canada) for the production of battery-grade cathode materials, with construction scheduled to begin in 2023 and production to come online by the end of 2025, with capacity to provide for about 1 million EVs annually.
Ag-Chem and Ag-Tech
Soybean expectations lowered.&nbsp;The USDA’s&nbsp;World Agricultural Supply and Demand Estimates (WASDE) for July 2022&nbsp;showed no change in corn estimates, but included a reduction in soybean planted acres and therefore exports. With weather being the key focus for corn and soybean crop over the next two to four weeks, yield estimates, which were left largely unchanged, may have to be reduced, signaling that higher crop prices may remain, which may help farmers offset higher input costs and lower bushels to still generate acceptable, albeit likely lower than last year’s cash income by the end of this ag season.&nbsp;The USDA report also included raised expectations for LATAM production and higher wheat plantings and production in the US, as we mentioned last week. Most intriguing, the report includes estimates of significantly lower cotton planting and production in the US this year, driven by drought conditions across the southern plains.
Governments continue to tighten the regulatory noose.&nbsp;While the world is in the midst of dealing with what could turn out to be one of the worst food security issues in a generation or more, due to the conflict in Ukraine,&nbsp;the Dutch government voted last month on proposals to slash emissions of damaging pollutants, a plan that will likely force farmers in the country to cut their livestock herds or stop work altogether. The government says emissions of nitrogen oxide and ammonia, which livestock produce, must be drastically reduced to meet its and the EU’s climate goals.&nbsp;Dutch farmers have been demonstrating in cities and towns across the country&nbsp;to protest the government decision that, in farmers’ views, callously sacrifices the country’s farm industry on the altar of climate change. While one may debate the merits of government policies in normal times, enforcing these new laws during times of real geopolitical and economic crises appears questionable. On a related note, Brazil continues to actively work to lower or eliminate the use dangerous chemicals-based ag input products in the country. The government’s latest move is to suspend the import, production, distribution, and commercialization of the active ingredient&nbsp;Carbendazim and its technical products. Carbendazim is a leading broad spectrum fungicide used by itself or in combination with other active ingredients. Among the companies in our WTR-CMCCI index, FMC appears most at risk, should the government decide to permanently ban or restrict the use of the fungicide in the country. On the other hand, bio-based fungicides, such as those being manufactured by Marrone Bio, which is soon to merge with Bioceres (NASDAQ: BIOX), may get a boost from these actions, as they provide a viable alternative to chem-based fungicides.
Chemicals and Materials News
Looking to benefit from growth in e-commerce.&nbsp;FUL recently announced it has&nbsp;entered a strategic partnership&nbsp;in North America with Enimac, an international tape application equipment manufacturer that serves more than 100 customers in more than 30 countries. The two companies will collaborate on the development of pressure-sensitive adhesives and tape dispensing equipment to help FUL gain additional share in the packaging market, whose growth is increasingly driven by e-commerce applications. While this may not be a game changer for FUL, the partnership should allow the company to accelerate its growth in an important packaging market, potentially helping to offset an expected slowdown in construction and assembly adhesives areas.
Commodity prices ease, but downstream derivatives still headed higher.&nbsp;Both polyethylene (PE) and polypropylene (PP)&nbsp;resin prices declined $0.02/lb. and $0.03/lb., respectively, last week. With slowing economic conditions and easing crude oil and gas prices, commodity resin prices may continue their decline off recent highs in the weeks and months ahead. This would be a positive for AVNT, which purchases significant quantities of commodity resins before converting them to specialty and engineered plastic compounds and we may see the company’s margins begin to improve sequentially in 2H22, although Y/Y comps are likely to remain challenging into 2023. However, prices of pet-chem derivatives, such as coatings, adhesives and composites resins, are still going up, as companies attempt to restore their margins following the sharp run-up in raw material costs, including basic polymers and resins over the past 12 months. Thus,&nbsp;Wacker is increasing prices&nbsp;for dispersions, resins, and dispersible polymer powders sourced from its production sites in Europe by up to 10%. Nevertheless, intermediate suppliers such as Wacker may have the toughest time restoring their margins, given that their raw materials are commodities highly correlated with oil and gas prices, while their products are sold in a highly competitive market that limits the ability to raise prices fast enough to offset raw material inflation. In our WTR-CMI index, EMN, KOP, and KWR may be most exposed to this margin compression trend, and we remain cautious of these companies’ abilities to deliver 2022 results that would positively surprise versus current expectations.
Rating and Price Target Changes
ALB –&nbsp;UBS lowered its price target (PT) to $218 from $260 and maintained its Neutral rating.
AXTA –&nbsp;UBS lowered its PT to $30 from $33 and reiterated its Buy rating; Mizuho Securities lowered its PT to $31 from $34 and reiterated its Buy rating.
CTVA –&nbsp;UBS lowered its PT to $64 from $68 and reiterated its Buy rating; Credit Suisse initiated coverage with an Outperform rating and $68 PT.
EAF –&nbsp;RBC downgraded the stock to Sector Perform from Outperform and lowered its PT to $7 from $10.
ECL&nbsp;– BofA downgraded the stock to Neutral from Buy and lowered its PT to $183 from $193; Wells Fargo initiated on the stock with Overweight and $187 PT; RBC lowered its PT to $190 from $225 and maintained its Sector Perform rating.
EMN –&nbsp;RBC lowered its PT to $94 from $109 and maintained its Sector Perform rating; UBS lowered its PT from $142 to $121 but reiterated its Buy rating; BofA lowered its PT to $115 from $123 and maintained its Neutral rating.
FMC –&nbsp;UBS lowered its PT to $140 from $149 and reiterated its Buy rating.
RPM –&nbsp;BofA lowered its PT to $78 from $90 and reiterated its Underperform rating; UBS lowered its PT from $106 to $96 and reiterated its Buy rating.
PPG –&nbsp;UBS lowered its PT to $161 from $177 and reiterated its Buy rating; BofA lowered its PT to $161 from $172 and reiterated its Buy rating; Mizuho Securities lowered its PT to $162 from $169 and reiterated its Buy rating.
SHW –&nbsp;Northcoast Research reinstated coverage with a Buy rating and $300 PT; BofA downgraded the stock to Neutral from Buy and lowered its PT to $292 from $313; Mizuho Securities lowered its PT to $294 from $310 and reiterated its Buy rating.
Recent WTR Publications and Upcoming Events
Management Series Report – Marrone Bio Innovations CEO Kevin Helash
Management Series Report – Westwater Resources Executive Chairman Terence Cryan and CAO Steven Cates
Initiation of Coverage – Westwater Resources, Inc.
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 July 17, 2022

<h2>KEY HIGHLIGHTS</h2>
<ul style="list-style-type: none;">
<li>&nbsp;</li>
</ul>
<ul>
<li>WTR-CMI last week.&nbsp;After a dead cat bounce the previous week, last week saw the market resume its sell-off, with the S&amp;P 500 and Russell 2000 each losing 2.2% of their value for the week. Our WTR-CMI index of 30 chemicals and materials technology companies delivered a slightly weaker result (2.5%), dragged down by the volatile lithium sector, as PLL, ALB, LTHM, and LAC all lost 8% to 14% of their value for the week. A stronger aerospace outlook contributed to PKE’s 3.2% appreciation and improved investor sentiment following a proxy fight likely drove AVD’s 2.8% appreciation.</li>
<li>Ag-chem players step on bio-based pedal.&nbsp;FMC announced the creation of a new identity for its plant health business, called&nbsp;Biologicals by FMC&nbsp;and announced the&nbsp;acquisition of BioPhero ApS, a Danish pheromone research and production company, to further boost its biologicals portfolio of products for $200 million, with the deal expected to close by the end of 3Q22. Meanwhile,&nbsp;CTVA, BASF, and MS Technologies signed an agreement&nbsp;to bring an industry-first soybean trait stack to market in the US and Canada. As part of the agreement, CTVA and MS Technologies have licensed the Enlist E3 soybean trait to BASF for development with the NRS trait in BASF germplasm.</li>
<li>NA lithium production plans expand.&nbsp;Lithium producer Sayona Mining and its partner PLL approved the restart of their spodumene plant in Canada at a cost of C$98 million ($76.19 million). Operations at the&nbsp;North American Lithium (NAL) project&nbsp;located near Val-d’Or, Quebec are expected to commence in 1H23. Meanwhile,&nbsp;ALB announced its intentions to build a processing plant&nbsp;with 100,000 mt of annual capacity in the US, possibly using its mothballed mine in North Carolina as a source of spodumene for the plant to process, possibly as early as 2027.</li>
<li>Specialty segments looking to grow.&nbsp;The global&nbsp;protective coatings market&nbsp;is projected to grow at 3.4% CAGR to $16.7 billion by 2030 from $12.2 billion in 2021. While not spectacular, this steady growth should be a positive for SHW, PPG, AXTA, and especially RPM and may help mitigate the continuing doldrums in auto/transportation coatings and&nbsp;softening construction markets. Also, demand for&nbsp;plastics in medical applications&nbsp;is expected to grow at a 7.8% CAGR through 2032, which is a positive for AVNT.</li>
</ul>
<h2>WTR-CMI WEEKLY PERFORMANCE</h2>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/285/191/original/image_71701074321657248484378.png?1657248487" class="editor-image img-responsive" data-smartkarma-image-id="285191"></figure>
<p>Source: YCharts; July 1 close</p>
<h2>Automotive &amp; Transportation Market</h2>
<p>Automotive doldrums continue.&nbsp;As June new passenger car registration data dribble in,&nbsp;France is already looking at a 14% Y/Y decline&nbsp;in registrations for the month, pointing to continuing struggles for the sector. Meanwhile,&nbsp;Toyota cut its July production plans&nbsp;by 50,000 units globally on COVID-19 lockdowns and semiconductor shortages, while Stellantis announced temporary production halts&nbsp;in Italy&nbsp;and&nbsp;France&nbsp;due in large part to ongoing semiconductor shortages. Not surprising then that&nbsp;AlixPartners expects&nbsp;the chip shortage and other supply chain issues to affect the industry through 2024 and is looking for 2022 new vehicle production to decline from 2021 levels globally. Cox Automotive also recently&nbsp;lowered is outlook for the US market&nbsp;to 14.4 million units, down from 15.3 million. Given this backdrop, we continue to remain cautious on PPG and AXTA, two of the top three coatings suppliers to the automotive industry, as well as AVNT and FUL—a significant amount of whose sales also go into the automotive and transportation markets.</p>
<h2>EVs &amp; Battery Ecosystem</h2>
<p>Car companies see battery supply to be the bottleneck in EU’s plans to move off ICEs.&nbsp;The region’s goal of phasing out internal combustion engines (ICEs) by 2040 may be difficult to obtain, not due to lack of automotive production capacity, but by limited battery production capacity for electric vehicles (EVs). Both&nbsp;VW&nbsp;and&nbsp;Stellantis&nbsp;managements voiced their concerns over the speed with which battery manufacturing is expanding compared with the forecasted needs of the automotive sector. The rising prices of EVs, driven by double- and triple-digit increases in the cost of critical materials, such as lithium for the EV batteries, pose yet another concern for the market as it pivots away from ICEs.</p>
<p>Efforts to head off material shortages continue.&nbsp;To secure the needed critical battery materials, automotive companies continue to partner with raw material suppliers in an effort to mitigate the expected market tightness that is expected to worsen in the next three to five years. Recently,&nbsp;Stellantis announced an investment in Vulcan Energy Resources&nbsp;(OTC: VULNF), a German-Australian lithium producer. The €50 million investment represents an 8% stake in the company, making Stellantis its second-largest shareholder. Vulcan and Stellantis have also extended their binding off-take agreement for lithium hydroxide by five to 10 years. Similarly, South Korean battery maker&nbsp;LG Energy Solutions announced&nbsp;a non-binding deal for battery-grade lithium supply with Compass Minerals (NYSE: CMP), under which LG would receive as much as 40% of lithium carbonate and lithium hydroxide that CMP produces for seven years, starting in 2025. Meanwhile, Brazilian lithium development company&nbsp;Sigma Lithium (NASDAQ: SGML) announced positive results&nbsp;of its drilling program and the company remains on track to begin producing early next year at an annual rate of 37,000 mt of lithium carbonate equivalent (LCE), as it wraps up engineering for a second phase that would take output to about 72,000 mt in 2024. Given the implied environmental benefit of moving from ICEs to battery-powered vehicles, efforts to achieve circular economy status when it comes to the end of live EV batteries is gaining steam, as&nbsp;Toyota recently announced&nbsp;collaboration with battery recycling company&nbsp;Redwood Materials&nbsp;as it works to provide a more sustainable battery supply chain for its EV push.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Pressure mounts as weather impact and input shortages intensify.&nbsp;Supply issues and higher costs are top of mind for US farmers,&nbsp;according to a recent survey. Agrichemical companies blame the COVID-19 pandemic, transportation delays, a lack of workers, and extreme weather for shortages of key inputs such as herbicides and insecticides. Fertilizer and some seeds are also in short supply globally. It is unclear if the situation will improve for the 2022-23 planting season. Meantime,&nbsp;weather continues to be the wild card&nbsp;in predicting ultimate yields for major crops in the US,&nbsp;with small reductions in soybean and corn conditions&nbsp;already being noted.</p>
<p>Wheat supply concerns add to global food security issues.&nbsp;Lack of rain in&nbsp;winter wheat growing regions of US&nbsp;and high humidity in other parts of the country are fueling concerns over global food security issues, even as the war in Ukraine continues to affect the supply outlook from that region. Ukrainian farmers, often unable to find fuel for their combines and tractors needed to bring in the harvest, thanks to Russia’s air and rocket campaign aimed at refineries, seaports, and many other parts of the country’s infrastructure, have resorted to&nbsp;destroying their harvesting equipment&nbsp;to prevent Russian forces from confiscating the wheat currently ripening in Ukrainian fields. With the hostilities likely to continue and its aftereffects likely to be felt long after armed conflict bogs down, the 2023 outlook is not much better.</p>
<p>Government regulators aren’t making life easier either.&nbsp;The European Commission wants to&nbsp;cut the use of chemical pesticides in half by 2030, as part of its latest plan on sustainability and biodiversity. While the plans will need approval from the European Parliament and European Council before they can become law, at least some countries’ governments are expressing concerns that such a plan being implemented at a time when food scarcity is already a real danger may be tone-deaf at best. However, moves in this direction are likely to continue, in our opinion, which should be a positive for companies such as BIOX, which specializes in bio-based alternatives to chemical pesticides, as well as established ag-chem players like FMC and CTVA. In a more targeted move, The Brazilian National Health Surveillance Agency (Anvisa)&nbsp;suspended the import, production, distribution, and commercialization of the fungicide carbendazim—one of the most used fungicides in Brazil in crops such as soybeans, corn, oranges, and apples. Europe and the US have already banned the product on suspicion of causing cancer and fetal malformation. However, its ban in Brazil, LATAM’s largest ag producing region that’s still reliant on older, but cheaper ag-chem products for its crop production, may lead to temporary declines in yields and acres in the country, until alternative products are imported in sufficient quantities and at a sufficiently low price to allow Brazilian farmers to make a profit growing their crops.</p>
<p>…Or are they?&nbsp;Brazilian government’s Ministry of Agriculture, Livestock, and Supply recently&nbsp;defined the criteria for prioritizing the registration of agrochemicals and related issues. It is hoped that the more transparent and streamlined process will allow newer novel products and technologies that address the country’s most pressing pest needs will be allowed to proceed through the government’s registration process in a more rational and predictive fashion possibly shortening the time and expense of new product registrations, provided they address what the Ministry sees as the farm industry’s greatest needs at the moment. Meantime, while regulatory requirements are a contributing factor to farmers’ increasing adoption of sustainable practices,&nbsp;consumers are seen as the No.1 driver of this transition, which is a positive for bio-ag innovators, such as BIOX and other companies looking to change the way farmers produce and harvest their crops, so as to minimize the impact on the environment.</p>
<h2>Rating and Price Target Changes</h2>
<p>ALB –&nbsp;Credit Suisse initiated coverage of the stock with Underperform rating and $185 price target (PT); Vertical Research lowered its PT to $268 from $286 and maintained its Hold rating.</p>
<p>AVNT –&nbsp;Jefferies lowered its PT to $51 from $67 and reiterated its Buy rating.</p>
<p>AXTA&nbsp;–&nbsp;Vertical Research lowered its PT to $28 from $32 and maintained its Hold rating.</p>
<p>CTVA&nbsp;–&nbsp;Bank of America raised its PT to $57 from $51 and reiterated its Outperform rating; Vertical Research lowered its PT to $55 from $59 and maintained its Hold rating.</p>
<p>EAF&nbsp;–&nbsp;BMO lowered its PT to $9 from $10 and maintained its Market Perform rating.</p>
<p>ECL&nbsp;–&nbsp;Morgan Stanley lowered its PT to $181 from $210 and maintained its Equal Weight rating; Vertical Research lowered its PT to $169 from $185 and maintained its Hold rating; Mizuho Securities lowered its PT to $183 from $198 and maintained its Neutral rating.</p>
<p>EMN&nbsp;–&nbsp;Wells Fargo lowered its PT to $115 from $125 and reiterated its Outperform rating; Vertical Research lowered its PT to $117 from $136 and reiterated its Buy rating; Berenberg Bank also lowered its PT to $130 from $150 while reiterating its Buy rating.</p>
<p>FMC&nbsp;–&nbsp;Bank of America upgraded the stock to Buy from Underperform; Vertical Research lowered its PT to $116 from $126 and maintained its Hold rating.</p>
<p>FUL&nbsp;–&nbsp;JP Morgan downgraded the stock to Underperform from Neutral and set a $52 PT; Deutsche Bank also lowered its PT to $72 from $85 but reiterated its Buy recommendation.</p>
<p>LTHM&nbsp;–&nbsp;Vertical Research lowered its PT to $31 from $33 and reiterated its Buy recommendation.</p>
<p>PPG –&nbsp;Vertical Research upgraded the stock to Buy from Hold, despite lowering its PT to $139 from $154.</p>
<p>RPM&nbsp;–&nbsp;Credit Suisse initiated coverage with an Outperform rating and $95 PT; Vertical Research lowered its PT to $83 from $99 and maintained its Hold rating.</p>
<p>SHW&nbsp;–&nbsp;Evercore ISI lowered its PT to $280 from $305 and reiterated its Outperform rating; Vertical Research lowered its PT to $254 from $284 and maintained its Hold rating.</p>
<h2>Recent WTR Publications and Upcoming Events</h2>
<p>Management Series Report – Marrone Bio Innovations CEO Kevin Helash</p>
<p>Management Series Report – Westwater Resources Executive Chairman Terence Cryan and CAO Steven Cates</p>
<p>Initiation of Coverage – Westwater Resources, Inc.</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

&nbsp;


WTR-CMI last week.&nbsp;After a dead cat bounce the previous week, last week saw the market resume its sell-off, with the S&amp;P 500 and Russell 2000 each losing 2.2% of their value for the week. Our WTR-CMI index of 30 chemicals and materials technology companies delivered a slightly weaker result (2.5%), dragged down by the volatile lithium sector, as PLL, ALB, LTHM, and LAC all lost 8% to 14% of their value for the week. A stronger aerospace outlook contributed to PKE’s 3.2% appreciation and improved investor sentiment following a proxy fight likely drove AVD’s 2.8% appreciation.
Ag-chem players step on bio-based pedal.&nbsp;FMC announced the creation of a new identity for its plant health business, called&nbsp;Biologicals by FMC&nbsp;and announced the&nbsp;acquisition of BioPhero ApS, a Danish pheromone research and production company, to further boost its biologicals portfolio of products for $200 million, with the deal expected to close by the end of 3Q22. Meanwhile,&nbsp;CTVA, BASF, and MS Technologies signed an agreement&nbsp;to bring an industry-first soybean trait stack to market in the US and Canada. As part of the agreement, CTVA and MS Technologies have licensed the Enlist E3 soybean trait to BASF for development with the NRS trait in BASF germplasm.
NA lithium production plans expand.&nbsp;Lithium producer Sayona Mining and its partner PLL approved the restart of their spodumene plant in Canada at a cost of C$98 million ($76.19 million). Operations at the&nbsp;North American Lithium (NAL) project&nbsp;located near Val-d’Or, Quebec are expected to commence in 1H23. Meanwhile,&nbsp;ALB announced its intentions to build a processing plant&nbsp;with 100,000 mt of annual capacity in the US, possibly using its mothballed mine in North Carolina as a source of spodumene for the plant to process, possibly as early as 2027.
Specialty segments looking to grow.&nbsp;The global&nbsp;protective coatings market&nbsp;is projected to grow at 3.4% CAGR to $16.7 billion by 2030 from $12.2 billion in 2021. While not spectacular, this steady growth should be a positive for SHW, PPG, AXTA, and especially RPM and may help mitigate the continuing doldrums in auto/transportation coatings and&nbsp;softening construction markets. Also, demand for&nbsp;plastics in medical applications&nbsp;is expected to grow at a 7.8% CAGR through 2032, which is a positive for AVNT.

WTR-CMI WEEKLY PERFORMANCE

Source: YCharts; July 1 close
Automotive &amp; Transportation Market
Automotive doldrums continue.&nbsp;As June new passenger car registration data dribble in,&nbsp;France is already looking at a 14% Y/Y decline&nbsp;in registrations for the month, pointing to continuing struggles for the sector. Meanwhile,&nbsp;Toyota cut its July production plans&nbsp;by 50,000 units globally on COVID-19 lockdowns and semiconductor shortages, while Stellantis announced temporary production halts&nbsp;in Italy&nbsp;and&nbsp;France&nbsp;due in large part to ongoing semiconductor shortages. Not surprising then that&nbsp;AlixPartners expects&nbsp;the chip shortage and other supply chain issues to affect the industry through 2024 and is looking for 2022 new vehicle production to decline from 2021 levels globally. Cox Automotive also recently&nbsp;lowered is outlook for the US market&nbsp;to 14.4 million units, down from 15.3 million. Given this backdrop, we continue to remain cautious on PPG and AXTA, two of the top three coatings suppliers to the automotive industry, as well as AVNT and FUL—a significant amount of whose sales also go into the automotive and transportation markets.
EVs &amp; Battery Ecosystem
Car companies see battery supply to be the bottleneck in EU’s plans to move off ICEs.&nbsp;The region’s goal of phasing out internal combustion engines (ICEs) by 2040 may be difficult to obtain, not due to lack of automotive production capacity, but by limited battery production capacity for electric vehicles (EVs). Both&nbsp;VW&nbsp;and&nbsp;Stellantis&nbsp;managements voiced their concerns over the speed with which battery manufacturing is expanding compared with the forecasted needs of the automotive sector. The rising prices of EVs, driven by double- and triple-digit increases in the cost of critical materials, such as lithium for the EV batteries, pose yet another concern for the market as it pivots away from ICEs.
Efforts to head off material shortages continue.&nbsp;To secure the needed critical battery materials, automotive companies continue to partner with raw material suppliers in an effort to mitigate the expected market tightness that is expected to worsen in the next three to five years. Recently,&nbsp;Stellantis announced an investment in Vulcan Energy Resources&nbsp;(OTC: VULNF), a German-Australian lithium producer. The €50 million investment represents an 8% stake in the company, making Stellantis its second-largest shareholder. Vulcan and Stellantis have also extended their binding off-take agreement for lithium hydroxide by five to 10 years. Similarly, South Korean battery maker&nbsp;LG Energy Solutions announced&nbsp;a non-binding deal for battery-grade lithium supply with Compass Minerals (NYSE: CMP), under which LG would receive as much as 40% of lithium carbonate and lithium hydroxide that CMP produces for seven years, starting in 2025. Meanwhile, Brazilian lithium development company&nbsp;Sigma Lithium (NASDAQ: SGML) announced positive results&nbsp;of its drilling program and the company remains on track to begin producing early next year at an annual rate of 37,000 mt of lithium carbonate equivalent (LCE), as it wraps up engineering for a second phase that would take output to about 72,000 mt in 2024. Given the implied environmental benefit of moving from ICEs to battery-powered vehicles, efforts to achieve circular economy status when it comes to the end of live EV batteries is gaining steam, as&nbsp;Toyota recently announced&nbsp;collaboration with battery recycling company&nbsp;Redwood Materials&nbsp;as it works to provide a more sustainable battery supply chain for its EV push.
Ag-Chem and Ag-Tech
Pressure mounts as weather impact and input shortages intensify.&nbsp;Supply issues and higher costs are top of mind for US farmers,&nbsp;according to a recent survey. Agrichemical companies blame the COVID-19 pandemic, transportation delays, a lack of workers, and extreme weather for shortages of key inputs such as herbicides and insecticides. Fertilizer and some seeds are also in short supply globally. It is unclear if the situation will improve for the 2022-23 planting season. Meantime,&nbsp;weather continues to be the wild card&nbsp;in predicting ultimate yields for major crops in the US,&nbsp;with small reductions in soybean and corn conditions&nbsp;already being noted.
Wheat supply concerns add to global food security issues.&nbsp;Lack of rain in&nbsp;winter wheat growing regions of US&nbsp;and high humidity in other parts of the country are fueling concerns over global food security issues, even as the war in Ukraine continues to affect the supply outlook from that region. Ukrainian farmers, often unable to find fuel for their combines and tractors needed to bring in the harvest, thanks to Russia’s air and rocket campaign aimed at refineries, seaports, and many other parts of the country’s infrastructure, have resorted to&nbsp;destroying their harvesting equipment&nbsp;to prevent Russian forces from confiscating the wheat currently ripening in Ukrainian fields. With the hostilities likely to continue and its aftereffects likely to be felt long after armed conflict bogs down, the 2023 outlook is not much better.
Government regulators aren’t making life easier either.&nbsp;The European Commission wants to&nbsp;cut the use of chemical pesticides in half by 2030, as part of its latest plan on sustainability and biodiversity. While the plans will need approval from the European Parliament and European Council before they can become law, at least some countries’ governments are expressing concerns that such a plan being implemented at a time when food scarcity is already a real danger may be tone-deaf at best. However, moves in this direction are likely to continue, in our opinion, which should be a positive for companies such as BIOX, which specializes in bio-based alternatives to chemical pesticides, as well as established ag-chem players like FMC and CTVA. In a more targeted move, The Brazilian National Health Surveillance Agency (Anvisa)&nbsp;suspended the import, production, distribution, and commercialization of the fungicide carbendazim—one of the most used fungicides in Brazil in crops such as soybeans, corn, oranges, and apples. Europe and the US have already banned the product on suspicion of causing cancer and fetal malformation. However, its ban in Brazil, LATAM’s largest ag producing region that’s still reliant on older, but cheaper ag-chem products for its crop production, may lead to temporary declines in yields and acres in the country, until alternative products are imported in sufficient quantities and at a sufficiently low price to allow Brazilian farmers to make a profit growing their crops.
…Or are they?&nbsp;Brazilian government’s Ministry of Agriculture, Livestock, and Supply recently&nbsp;defined the criteria for prioritizing the registration of agrochemicals and related issues. It is hoped that the more transparent and streamlined process will allow newer novel products and technologies that address the country’s most pressing pest needs will be allowed to proceed through the government’s registration process in a more rational and predictive fashion possibly shortening the time and expense of new product registrations, provided they address what the Ministry sees as the farm industry’s greatest needs at the moment. Meantime, while regulatory requirements are a contributing factor to farmers’ increasing adoption of sustainable practices,&nbsp;consumers are seen as the No.1 driver of this transition, which is a positive for bio-ag innovators, such as BIOX and other companies looking to change the way farmers produce and harvest their crops, so as to minimize the impact on the environment.
Rating and Price Target Changes
ALB –&nbsp;Credit Suisse initiated coverage of the stock with Underperform rating and $185 price target (PT); Vertical Research lowered its PT to $268 from $286 and maintained its Hold rating.
AVNT –&nbsp;Jefferies lowered its PT to $51 from $67 and reiterated its Buy rating.
AXTA&nbsp;–&nbsp;Vertical Research lowered its PT to $28 from $32 and maintained its Hold rating.
CTVA&nbsp;–&nbsp;Bank of America raised its PT to $57 from $51 and reiterated its Outperform rating; Vertical Research lowered its PT to $55 from $59 and maintained its Hold rating.
EAF&nbsp;–&nbsp;BMO lowered its PT to $9 from $10 and maintained its Market Perform rating.
ECL&nbsp;–&nbsp;Morgan Stanley lowered its PT to $181 from $210 and maintained its Equal Weight rating; Vertical Research lowered its PT to $169 from $185 and maintained its Hold rating; Mizuho Securities lowered its PT to $183 from $198 and maintained its Neutral rating.
EMN&nbsp;–&nbsp;Wells Fargo lowered its PT to $115 from $125 and reiterated its Outperform rating; Vertical Research lowered its PT to $117 from $136 and reiterated its Buy rating; Berenberg Bank also lowered its PT to $130 from $150 while reiterating its Buy rating.
FMC&nbsp;–&nbsp;Bank of America upgraded the stock to Buy from Underperform; Vertical Research lowered its PT to $116 from $126 and maintained its Hold rating.
FUL&nbsp;–&nbsp;JP Morgan downgraded the stock to Underperform from Neutral and set a $52 PT; Deutsche Bank also lowered its PT to $72 from $85 but reiterated its Buy recommendation.
LTHM&nbsp;–&nbsp;Vertical Research lowered its PT to $31 from $33 and reiterated its Buy recommendation.
PPG –&nbsp;Vertical Research upgraded the stock to Buy from Hold, despite lowering its PT to $139 from $154.
RPM&nbsp;–&nbsp;Credit Suisse initiated coverage with an Outperform rating and $95 PT; Vertical Research lowered its PT to $83 from $99 and maintained its Hold rating.
SHW&nbsp;–&nbsp;Evercore ISI lowered its PT to $280 from $305 and reiterated its Outperform rating; Vertical Research lowered its PT to $254 from $284 and maintained its Hold rating.
Recent WTR Publications and Upcoming Events
Management Series Report – Marrone Bio Innovations CEO Kevin Helash
Management Series Report – Westwater Resources Executive Chairman Terence Cryan and CAO Steven Cates
Initiation of Coverage – Westwater Resources, Inc.
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 July 3, 2022

KEY HIGHLIGHTS


WTR-CMI last week.&nbsp;For the second week in a row, the market posted positive gains for the week, with the Russell 2000 leading with a 2.4% improvement, double the 1.2% appreciation of the S&amp;P 500. Our WTR-CMI index nearly kept pace with the large cap index by appreciating 0.9% last week.
Winners and losers.&nbsp;KOP and KWR led the stocks in our index with a 7.6% and 7.5% improvement, respectively. VVV also had a good week with a 5.2% appreciation, likely driven by the news that the company bought out its 50% JV partner in&nbsp;VCA Solutions, as well as reports that&nbsp;Saudi Aramco approached VVV&nbsp;about buying its industrial and fleet lube oil business. While lithium stocks were the top performers the prior week, with&nbsp;LAC announcing a collaboration agreement&nbsp;with Arena Minerals,&nbsp;PLL announcing positive results&nbsp;from a feasibility study of its Canadian spodumene property,&nbsp;LTHM announcing a collaboration&nbsp;with Lilium N.V. (NASDAQ: LILM), and&nbsp;ALB raising its 2022 guidance&nbsp;for the second time, last week saw these stocks at the bottom of the list as investors took profit and concerns over a lithium pricing peak were annunciated by a bulge bracket bank.
Another month of pain for the auto industry and its suppliers.&nbsp;After an ugly April, early May data on new car sales offer little hope of an improvement before 2H22. New car sales in&nbsp;France declined 10% Y/Y,&nbsp;Chinese sales&nbsp;look to be down 19% Y/Y, and companies still reporting monthly&nbsp;US sales&nbsp;indicate the domestic market in May was down 31% Y/Y. We therefore remain cautious on PPG and AXTA, given their high exposure to the automotive industry.
Organic food popularity continues to grow.&nbsp;Organic food sales&nbsp;grew 6% Y/Y in 2021&nbsp;and are expected to continue to grow at above-market rates. With organic farming being the first and still most important market for bio-based ag input products, the trend is especially beneficial to MBII and BIOX, as well as other ag-chem companies focused on bio-based alternatives.
End of a saga.&nbsp;Cruiser Capital was the winner of the proxy fight with AVD management, as&nbsp;all three of its board member nominees won shareholder approval. Cruiser, an activist shareholder focused on unlocking value, may now influence AVD’s future direction and strategy.

WTR-CMI WEEKLY PERFORMANCE

Automotive &amp; Transportation Market
Commercial vehicle market’s struggles continue.&nbsp;The European&nbsp;ACEA released its new commercial vehicle sales&nbsp;data for April, which showed a 27% Y/Y decline (20% reduction YTD) in monthly sales of commercial vehicles in the region, going against tough post-pandemic bounce in demand in 2021. While comps should get easier in June, May results may continue to see double-digit declines in sales (and by extension, production) of commercial vehicles. Furthermore, with Europe struggling with the economic impact of Russian sanctions, demand may not improve in 2H22 as we previously hoped, suggesting that negative monthly comps may continue through the summer months, and it may be 4Q22 before markets stabilize and demand turns positive.
Passenger vehicle markets decline.&nbsp;Although the Chinese government&nbsp;lifted the lockdown mandate in Shanghai&nbsp;earlier this month and cut taxes on new vehicle purchases in half to 5% through the end of 2022, the moves aren’t likely to reverse the multi-month trend of Y/Y sales declines of new passenger vehicles in the country in the short term. While the tax cut may spur a buying spree in 2H22, as a similar move did in 2015, it’s likely to come at the expense of future growth by pulling forward demand into 2022 and resulting in slower growth in 2023, as the tax regime returns to normal levels. But with the continuation of the zero tolerance policy when it comes to COVID cases, the Chinese economy may remain sluggish, suggesting the world’s largest automotive market is not out of the woods yet.
June starts off on a low note.&nbsp;Meanwhile,&nbsp;Toyota blamed parts shortages&nbsp;due to the Shanghai lockdowns for its reduction in June production targets to 850,000 vehicles worldwide, down from 950,000 expected previously. The company hopes to maintain that rate of production through August, but unless Shanghai ramps up its production activities rapidly in June, summer targets may be subject to further reductions. Similarly,&nbsp;Stellantis announced&nbsp;that its Jeep production plant in Southern Italy will stop production for a week due to semiconductor chip shortages, as that problem continues to persist in global markets, placing a limit on the speed of production recovery in the automotive industry in 2022. Consequently, 2Q22 may continue to see Y/Y declines in automotive and transportation markets affecting key suppliers to the industry, which in our sector include companies like PPG and AXTA, the two leading automotive coatings companies, as well as other suppliers, such as FUL (adhesives &amp; sealants), AVNT (specialty plastics and composites), and HXL (composites), among others.
Lithium &amp; EV Ecosystem
Domestic EV supply chain continues to evolve.&nbsp;Stellantis announced plans,&nbsp;in conjunction with its partner, Samsung SDI, to invest $2.5 billion in a new EV battery plant in Indiana, with production slated for 2025. To ensure adequate supply of lithium for the battery plant,&nbsp;Stellantis also announced an agreement&nbsp;with Controlled Thermal Resources Ltd. (CTR) to supply the company with up to 25,000 metric tons per year of lithium hydroxide over the 10-year term of the agreement. Meanwhile, even as the EV industry looks at a potential shortage of batteries needed to fully meet consumer demand by 2024-25,&nbsp;Panasonic is looking to triple the size of its battery business in North America&nbsp;by 2029 to try to meet the expected market demand in the region, as consumers here are expected to show a greater appetite for EVs, given the exorbitant gasoline prices in the wake of misguided federal policies and repercussions of Russian sanctions.
EV game is not for the faint of heart.&nbsp;The EV battery industry may be entering an early consolidation phase, as the UK’s&nbsp;Britishvolt said it will buy German battery cell developer and manufacturer EAS&nbsp;from Bulgaria’s Monbat for €36 million ($38.6 million) to help it scale up its own production of EV batteries. Meanwhile, another British company, Johnson Matthey, is getting out of the EV battery business by&nbsp;selling its related operations&nbsp;to EV Metals Group (European operations) and Nano One Materials (North American operations). Pooling resources and technological know-how may result in faster investments in battery production around the world, as well as accelerate improvements in battery technologies that can potentially close the industry’s lithium and other critical materials supply gap&nbsp;looming just over the horizon. One answer to the lithium and other battery materials expected shortage is to ramp up lithium battery recycling capacity. To that end,&nbsp;BMW’s Brilliance Automotive (BBA) joint venture has established a closed cycle recycling operation in China&nbsp;for the reuse of the raw materials nickel, lithium, and cobalt from high-voltage batteries. Although still in in the pilot stage, end-of-life battery recycling will be an essential part of the EV battery supply chain, driven by both critical material scarcity and environmental concerns, as recycling batteries reduces CO2&nbsp;emissions by up to 70% compared with mining, processing, and converting virgin materials for the battery industry.
African countries getting into the EV act.&nbsp;Not content to be relegated to a raw material supplier for critical metals such as cobalt and copper, The Democratic Republic of Congo and Zambia concluded a&nbsp;cooperation agreement&nbsp;to help develop a battery and electric materials industry in the region, rather than continue supplying the more developed parts of the world with the critical metals, losing out on the value creation that accompanies the processing of these metals into higher-value products for the battery and electrical components industries. It remains to be seen how successful these efforts are and what, if any, role China will play in developing the required infrastructure, but we are encouraged to see countries with primary metal deposits attempting to improve their economies by developing downstream capabilities, rather than exporting raw metals with economic benefits accruing to other regions.
Ag-Chem and Ag-Tech
Best cure for high prices is high prices (part 1).&nbsp;Sky-high fertilizer prices may have resulted in demand destruction, as farmers look for alternatives, like manure, minimize per ace use, and look for other ways to reduce their input costs. As a result, CF Industries (NYSE: CF) led a&nbsp;recent 30% price drop&nbsp;for nitrogen (ammonia) fertilizers. While the price reduction isn’t likely to positively affect farmers’ costs in the current season, it may begin a trend of input prices returning to more reasonable levels, which would set up US farmers for better incomes in 2023, provided commodity prices remain elevated, which appears likely given the disruptions to the global crop markets caused by Russia’s invasion of Ukraine and resulting disruptions not just to shipments of stored grains, but to this year’s plantings and therefore next year’s crop supplies.
US plantings finally catching up to five-year averages.&nbsp;Over the past two weeks, US farmers were able to take advantage of drier and warmer weather to&nbsp;almost catch up with their plantings of corn and soybeans, which now stand at just 1% below five-year averages. However, it may be too soon to declare victory, as soybean emergence stands at only 39% at the end of May 2022, compared with 59% last year and the five-year average of 43%. Finally, only 73% of the US spring wheat crop is in the ground. Normally 92% of it is planted by late May. We have yet to find out how much acreage was actually planted in the US compared with the USDA’s estimates and how much more acreage will be left fallow or planted with cover crops awaiting a better year next year (hopefully). Bottom line, we believe even with superior yields, US and LATAM harvests may fall short of meeting the global need for row crops and cereals, given the continuing war in Ukraine and disrupted supply chain as a result. This suggests commodity crop prices will remain elevated into the 2022-23 planting season, allowing US farmers to absorb the inflation seen in ag inputs from seeds to ag-chemicals to fertilizers. In turn, this should be a positive for ag-chem companies such as FMC, AVD, and CTVA, as well as bio-based crop protection companies such as MBII and BIOX.
In Other News
Bio-based inputs find applications beyond ag markets.&nbsp;The global market for&nbsp;bio-adhesives, or those products that use intermediates such as starch or gelatin, reached nearly $2.2 billion in 2021. Looking forward, IMARC Group expects the market to reach $4.81 billion by 2027, expanding at a CAGR of 13.9% from 2022-2027. Yet another industry being affected by improved performance of&nbsp;bio-based alternatives is plastics, specifically bio-based polyethylene and polypropylene made from renewable resources such as sugar cane, non-edible plants, and biogenic fats and oils. These and other similar developments highlight the chemical industry’s leading role in helping the global economy reach government-set mandates for carbon emission, minimized environmental impact of plastics and enable zero emissions and circular economy trends.
In the world of paints &amp; coatings.&nbsp;Chinese chloride-based TiO2&nbsp;historically has been a poor cousin to sulfate-based production in Europe and North America, which results in higher purity pigment that can be used in more demanding applications. However, most of TiO2&nbsp;capacity expansions to serve the paints &amp; coatings industry (TiO2’s primary end-market) have occurred in China. As the Chinese housing market stalled,&nbsp;more of this volume found a home in export markets. As chloride-based technology improves and the performance gap between chloride and sulfate processes narrows, price differences between the two sources are narrowing as well. Should China’s construction market recover, higher domestic demand may result in less export volumes, which has the potential to drive up TiO2&nbsp;prices and put further pressure on paints &amp; coatings companies’ margins, even as volume growth remains elusive and consumer tolerance of higher prices erodes. We therefore remain cautious on SHW, PPG, AXTA, and RPM for the time being. Speaking of PPG,&nbsp;a recent story&nbsp;suggests the company may be looking at joining forces with AXTA, something that’s been rumored on and off for the past two years. While we believe antitrust issues related to automotive OEM and collision repair coatings may make the combination difficult (we believe SHW to be a more natural acquirer of AXTA, given its lack of sizable transportation coatings business), a merger and subsequent divestitures of some of the businesses could be a solution PPG may be willing to entertain.
Best cure for high prices is high prices (part 2).&nbsp;Subdued demand and full warehouses are resulting in&nbsp;commodity resin prices, such as those of polyethylene and polypropylene, to decline recently for the first time in several months. While it remains to be seen if the trend can hold, given rising oil and natural gas prices, the reduction in spot and contract prices may be a positive for large commodity plastic consumers, such as AVNT, as well companies that utilize plastic packaging in their products (everyone from ECL to MBII), which may see their margins improve ahead of expectations over the next one to two quarters.
Recent WTR Publications and Upcoming Events
Management Series Report – Marrone Bio Innovations CEO Kevin Helash
Westwater Resources (NYSE: WWR) Fireside Chat – June 9
Rating and Price Target Changes
ALB –&nbsp;KeyBank raised its price target (PT) to $217 from $215 and reiterated its Underweight rating; Wells Fargo raised its PT to $320 from $285 and reiterated its Outperform rating; RBC raised its PT to $314 from $300 and reiterated its Outperform rating; Deutsche Bank raised its PT to $320 from $290 and reiterated its Buy recommendation; Berenberg Bank raised its PT to $260 from $250 and reiterated its Buy rating; UBS downgraded the stock to Neutral from Buy and reduced its PT to $260 from $300.
CMP –&nbsp;Deutsche Bank lowered its PT to $55 from $73 but reiterated its Buy recommendation.
CTVA –&nbsp;Deutsche Bank raised its PT to $72 from $64 and reiterated its Buy rating; Barclays initiated coverage with an Overweight recommendation and $71 PT.
ECL –&nbsp;Argus lowered its PT to $200 from $230 but reiterated its Buy recommendation; UBS on the other hand upgraded the stock to Buy from Neutral and raised its PT to $205 from $186; Credit Suisse upgraded the stock to Outperform from Neutral and raised its PT to $195 from $180.
EMN –&nbsp;Credit Suisse initiated coverage with Outperform and $130 PT.
FMC –&nbsp;Credit Suisse initiated coverage with Underperform and $109 PT.
PLL –&nbsp;Cowen initiated coverage with Outperform and $90 PT.
PPG –&nbsp;Credit Suisse initiated coverage with Underperform and $115 PT.
SHW –&nbsp;Credit Suisse initiated coverage with Underperform and $245 PT; Evercore ISI raised its PT to $310 from $290 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 June 5, 2022

<h2>KEY HIGHLIGHTS</h2>
<ul>
<li>WTR-CMI last week.&nbsp;In what was a down week for the market overall, our WTR-CMI index of 30 chemicals and materials technology stocks declined 1.8%, which still beat both the S&amp;P 500’s (2.8%) and Russell 2000’s (3.2%) returns for the week.</li>
<li>Winners and losers. Stronger than expected 1Q22 results drove AVNT (up 10.8%), and PPG (up 3.6%) last week, with AVNT also benefiting from the&nbsp;announced acquisition&nbsp;of DSM’s Protective Materials business, which would expand the company’s position in the advanced composites industry. At the other end of the spectrum, the ever-volatile lithium names came under pressure, possibly on news that Chinese lithium carbonate production exceeded expectations, with LTHM losing 10.7%, LAC pulling back 9.3%, and PLL and ALB seeing their stock prices decline 5.3% and 4.9% respectively.</li>
<li>Construction market losing steam in US.&nbsp;Construction and Transportation markets represent 40-50% of a typical chemicals and materials company’s sales, so the performance of these industries is a key barometer of performance for the companies in their respective supply chains. With the global automotive industry struggling with semiconductor shortages, COVID lockdowns, and logistical issues, the strength of the construction market helped shore up volumes for many companies in our sector in 2021. However, recent&nbsp;weakness in this market, driven by cost inflation and now, higher mortgage rates, may spell trouble for companies with exposure to the sector, including SHW, PPG, FUL and RPM. Furthermore, with&nbsp;homebuilders’ sentiment declining, construction market woes may be just beginning.</li>
<li>Organic production drives bio-based ag-chem growth.&nbsp;Organic fresh produce sales grew 4% Y/Y&nbsp;in 1Q22, and while growth was driven by higher prices, as volumes declined 1%, they still outperformed conventional produce sales, which saw volume drop of 2.7% Y/Y. Continued adoption of organic farming is one of many reasons bio-ag companies like MBII and BIOX are seeing strong growth, while&nbsp;established ag-chem companies jockey for position&nbsp;in this evolving industry. With fertilizer prices and availability becoming in issue (see below),&nbsp;biostimulants market segment&nbsp;may see even stronger adoption rates.</li>
</ul>
<h2>WTR-CMI WEEKLY PERFORMANCE</h2>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/270/791/original/image_73769124821651103162837.png?1651103165" class="editor-image img-responsive" data-smartkarma-image-id="270791"></figure>
<p>Source: YCharts, April 22 close</p>
<h2>Automotive &amp; Transportation</h2>
<p>Bad start to the year in Europe. 1Q22&nbsp;ACEA statistics&nbsp;on new auto registrations in Europe were released, showing a 20.5% Y/Y drop in March (ninth consecutive month of Y/Y declines), which brought 1Q22 registrations down 12.3% Y/Y. With 1Q22 containing only one month (March) of tough Y/Y comps and 2Q22 coming against the last two strong months of 2021, April and May, this quarter’s performance may not show much if any improvement compared to 1Q22 results. Companies with significant exposure to the European automotive market, such as AXTA and BASF (and to a lesser degree, PPG) may therefore continue to struggle with volumes, even as they raise prices in order to catch up with inflationary raw material costs. Results therefore appear more likely to disappoint, at least until we get into easier Y/Y comps in 2H22.</p>
<p>COVID lockdown impact yet to be worked out, while European war adds further concerns. While the Chinese government appears to be relaxing the lockdowns in Shanghai, the&nbsp;restart of production in the region&nbsp;is going far from smoothly. In the meantime, the lockdowns and shuttered production impacted the already tight semiconductor market, with&nbsp;Chinese chip output down 4.2%&nbsp;Y/Y, the first time Y/Y production slipped since 1Q19. With chip shortages continuing to be an issue holding back auto production globally,&nbsp;Honda joined the list of companies cutting back on auto builds&nbsp;at its factories in Japan, citing COVID lockdowns and chip shortages as the reason. And as if that wasn’t enough of a headwind for the industry,&nbsp;Continental, one of the major global tire producers, recently lowered its earnings outlook&nbsp;for the year, citing higher material costs due to the war in Ukraine, as well as related supply chain disruptions.</p>
<h2>Lithium &amp; EV Ecosystem Developments</h2>
<p>Supply chain tie-ups continue. Companies throughout the EV supply chain look to both secure critical metals and materials for batteries and electric motors powering the EV transition, and to reduce if not eliminate the near total dependence on China for these strategic materials. China, for example, supplies near 100% of rare earths, used in magnets driving electric motors. One global electric motor producer, Schaeffler,&nbsp;recently announced a deal&nbsp;to source rare earths for its magnets from Norway, reducing its dependence on China, at least after 2024. Graphite, another critical material for EV batteries, is also expected to see strong growth going forward, with auto companies seeking to secure their supply of the material with off-take agreements with producers. Recently, a US unit of Australian company Syrah Resources Ltd.&nbsp;announced the receipt of $107M in a conditional loan&nbsp;from the Biden Administration to expand its facility in Louisiana and provide a domestic source of graphite for Tesla’s operations.</p>
<p>Efforts to domesticate EV supply chain. Again, both in an effort to shorten and simplify the supply chain, but also to reduce reliance on China, manufacturers and governments are working to develop local ecosystems for EV production. Thus,&nbsp;South Korean battery companies are looking to develop and expand nickel production in Indonesia, signing an agreement with Indonesian state-owned companies for a project worth around $9 billion over time. Closer to home, the founder of Britishvolt and Italvolt has announced the creation of another subsidiary, this time in the US, named Statevolt, for the purpose of&nbsp;building a lithium battery factory in U.S., most likely in Southern California’s Imperial Valley, which will offer an annual capacity of 54 GWh when fully expanded.</p>
<p>Impact of chip shortages spreading to EVs. While the semiconductor shortage has plagued the auto industry for well over a year, the EV industry seemed largely immune. That may be changing, as EV production halts have begun to occur more often, usually blamed on chip shortages, but now also on supply disruptions related to the war in Ukraine.&nbsp;Renault had to pause production&nbsp;of its all-electric Mégane E-Tech Electric brand in France for over 10 days recently. With chip shortages expected to last into 2024, their impact on EV production may expand which, combined with higher material and battery costs (and resulting higher vehicle costs), may temper the pace of growth of EVs globally.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Real world implications from the war in Ukraine. As expected, Russia’s invasion of Ukraine is having a catastrophic impact on the country’s ag sector. Government officials already warned that this year’s plantings may be down as much as 50%, perhaps more, as the result of the conflict. The latest&nbsp;planting updates&nbsp;from the region do not provide cause for optimism. And despite the heroism of the farmers that are getting out into the fields despite shelling, land mines, and&nbsp;shortages of everything from fuel to fertilizers, this year’s production may barely suffice for internal use, with longer term impact likely to be felt for years to come. Aside from the planting and production shortfall in Ukraine, the impact of sanctions and counter sanctions continue to be evaluated from the global perspective. And while American farmers may be&nbsp;less impacted by potential shortages of fertilizers, given that our needs are met largely by domestic or Canadian production, in Brazil, which imports 75-95% of its fertilizer needs, much of it from Russia and Belarus, price and availability may become a real issue for the region’s ag industry.</p>
<p>Availability of ag inputs. Given the importance of Brazil in the global market as a producer and exporter of row crops, acreage or yield declines due to unavailability of crop inputs can have devastating effects on global food security. On a positive note, a&nbsp;<a href="https://www.thedailyscoop.com/news/retail-industry/russian-fertilizer-shipments-continue-brazil?mkt_tok=ODQzLVlHQi03OTMAAAGD5dKOWK90TEnesgpbtZe3iLXpaEggk9J1LM6TmfkjaeW3Qy8y6HyZwt-WyOqH6hPxO3iOo8z3xhMlCub_jFOlpylGdDRUpD3Ac_euHYreRSD1-qcTAQ" target="_blank" rel="noopener">recent report by </a>Reuters&nbsp;mentioned that least 24 vessels carrying almost 678,000 MT of Russian fertilizers will reach Brazil in the following weeks. However, with 11 of the 24 vessels leaving port after the February 24 start of hostilities, the flow of fertilizer from Russia into the country may slow, even as demand ramps up, leaving plenty of uncertainty in the market as to the ultimate production quantities that would be available for export. Speaking of Brazil, the&nbsp;country’s wheat industry saw a strong uptick in herbicide use in 2021, driven in part by growth in planted acres, but also by growing adoption of pre-harvest desiccation. Wheat being an important end-market for BIOX’s sales and a growth opportunity for MBII as it partners with BIOX to expedite its penetration of the LATAM market, we see this is a positive for the combined company, as well as for ag-chem majors like CTVA, BASF and Bayer.</p>
<p>As if the war and cost inflation wasn’t enough. While one would expect the conflict in Europe to disrupt production and shipping of fertilizers, Union Pacific’s limitations on fertilizer shipments in domestic markets is adding insult to injury.&nbsp;CF Industries’ notice of UP reducing shipments&nbsp;of its nitrogen and hydrogen products by 20% may impact the company’s ability to meet new or incremental demand, adding to availability concerns many farmers already face, not to mention likely contributing to higher fertilizer prices if alternative shipping arrangements are required. The one remaining silver lining is the&nbsp;continuing upward trend in grain prices, which suggest US farmers may still deliver strong results, even with higher costs of everything from fertilizers to crop protection chemicals, to fuel, to labor, to land.</p>
<h2>Rating and Price Target Changes</h2>
<p>ALB&nbsp;– RBC raised its price target (PT) to $276 from $275 and reiterated its Outperform rating.</p>
<p>ASH&nbsp;– Wells Fargo raised its PT to $113 from $105 while maintaining its Equal Weight recommendation; Mizuho also raised its PT to $136 from $129, reiterating its Buy rating.</p>
<p>AVNT&nbsp;– Wells Fargo raised its PT to $65 from $60 and reiterated its Overweight rating; Oppenheimer also raised its PT to $69 from $68 and reiterated its Outperform rating.</p>
<p>AXTA&nbsp;– Deutsche Bank downgraded the stock to Hold from Buy and lowered PT to $27 from $34; Wells Fargo reduced its PT to $27 from $32 and maintained its Equal Weight rating.</p>
<p>CMP&nbsp;– BMO raised its PT to $63 from $60 and maintained its Market Perform rating.</p>
<p>CTVA&nbsp;– RBC raised its PT to $67 from $57 and reiterated its Outperform rating.</p>
<p>EAF&nbsp;– RBC lowered its PT to $112 from $113 but reiterated its Outperform rating.</p>
<p>EMN&nbsp;– BofA downgraded the stock to Neutral from Buy and lowered its PT to $124 from $150; Wolfe Research downgraded the stock to Peer Perform from Outperform and lowered its PT to $114 from $130.</p>
<p>FMC&nbsp;– RBC raised its PT to $152 from $135 and reiterated its Outperform rating.</p>
<p>PPG&nbsp;– Wells Fargo lowered its PT to $140 from $170 and maintained its Equal Weight rating.</p>
<p>SHW&nbsp;– Wells Fargo lowered its PT to $275 from $315 and maintained its Equal Weight 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 what was a down week for the market overall, our WTR-CMI index of 30 chemicals and materials technology stocks declined 1.8%, which still beat both the S&amp;P 500’s (2.8%) and Russell 2000’s (3.2%) returns for the week.
Winners and losers. Stronger than expected 1Q22 results drove AVNT (up 10.8%), and PPG (up 3.6%) last week, with AVNT also benefiting from the&nbsp;announced acquisition&nbsp;of DSM’s Protective Materials business, which would expand the company’s position in the advanced composites industry. At the other end of the spectrum, the ever-volatile lithium names came under pressure, possibly on news that Chinese lithium carbonate production exceeded expectations, with LTHM losing 10.7%, LAC pulling back 9.3%, and PLL and ALB seeing their stock prices decline 5.3% and 4.9% respectively.
Construction market losing steam in US.&nbsp;Construction and Transportation markets represent 40-50% of a typical chemicals and materials company’s sales, so the performance of these industries is a key barometer of performance for the companies in their respective supply chains. With the global automotive industry struggling with semiconductor shortages, COVID lockdowns, and logistical issues, the strength of the construction market helped shore up volumes for many companies in our sector in 2021. However, recent&nbsp;weakness in this market, driven by cost inflation and now, higher mortgage rates, may spell trouble for companies with exposure to the sector, including SHW, PPG, FUL and RPM. Furthermore, with&nbsp;homebuilders’ sentiment declining, construction market woes may be just beginning.
Organic production drives bio-based ag-chem growth.&nbsp;Organic fresh produce sales grew 4% Y/Y&nbsp;in 1Q22, and while growth was driven by higher prices, as volumes declined 1%, they still outperformed conventional produce sales, which saw volume drop of 2.7% Y/Y. Continued adoption of organic farming is one of many reasons bio-ag companies like MBII and BIOX are seeing strong growth, while&nbsp;established ag-chem companies jockey for position&nbsp;in this evolving industry. With fertilizer prices and availability becoming in issue (see below),&nbsp;biostimulants market segment&nbsp;may see even stronger adoption rates.

WTR-CMI WEEKLY PERFORMANCE

Source: YCharts, April 22 close
Automotive &amp; Transportation
Bad start to the year in Europe. 1Q22&nbsp;ACEA statistics&nbsp;on new auto registrations in Europe were released, showing a 20.5% Y/Y drop in March (ninth consecutive month of Y/Y declines), which brought 1Q22 registrations down 12.3% Y/Y. With 1Q22 containing only one month (March) of tough Y/Y comps and 2Q22 coming against the last two strong months of 2021, April and May, this quarter’s performance may not show much if any improvement compared to 1Q22 results. Companies with significant exposure to the European automotive market, such as AXTA and BASF (and to a lesser degree, PPG) may therefore continue to struggle with volumes, even as they raise prices in order to catch up with inflationary raw material costs. Results therefore appear more likely to disappoint, at least until we get into easier Y/Y comps in 2H22.
COVID lockdown impact yet to be worked out, while European war adds further concerns. While the Chinese government appears to be relaxing the lockdowns in Shanghai, the&nbsp;restart of production in the region&nbsp;is going far from smoothly. In the meantime, the lockdowns and shuttered production impacted the already tight semiconductor market, with&nbsp;Chinese chip output down 4.2%&nbsp;Y/Y, the first time Y/Y production slipped since 1Q19. With chip shortages continuing to be an issue holding back auto production globally,&nbsp;Honda joined the list of companies cutting back on auto builds&nbsp;at its factories in Japan, citing COVID lockdowns and chip shortages as the reason. And as if that wasn’t enough of a headwind for the industry,&nbsp;Continental, one of the major global tire producers, recently lowered its earnings outlook&nbsp;for the year, citing higher material costs due to the war in Ukraine, as well as related supply chain disruptions.
Lithium &amp; EV Ecosystem Developments
Supply chain tie-ups continue. Companies throughout the EV supply chain look to both secure critical metals and materials for batteries and electric motors powering the EV transition, and to reduce if not eliminate the near total dependence on China for these strategic materials. China, for example, supplies near 100% of rare earths, used in magnets driving electric motors. One global electric motor producer, Schaeffler,&nbsp;recently announced a deal&nbsp;to source rare earths for its magnets from Norway, reducing its dependence on China, at least after 2024. Graphite, another critical material for EV batteries, is also expected to see strong growth going forward, with auto companies seeking to secure their supply of the material with off-take agreements with producers. Recently, a US unit of Australian company Syrah Resources Ltd.&nbsp;announced the receipt of $107M in a conditional loan&nbsp;from the Biden Administration to expand its facility in Louisiana and provide a domestic source of graphite for Tesla’s operations.
Efforts to domesticate EV supply chain. Again, both in an effort to shorten and simplify the supply chain, but also to reduce reliance on China, manufacturers and governments are working to develop local ecosystems for EV production. Thus,&nbsp;South Korean battery companies are looking to develop and expand nickel production in Indonesia, signing an agreement with Indonesian state-owned companies for a project worth around $9 billion over time. Closer to home, the founder of Britishvolt and Italvolt has announced the creation of another subsidiary, this time in the US, named Statevolt, for the purpose of&nbsp;building a lithium battery factory in U.S., most likely in Southern California’s Imperial Valley, which will offer an annual capacity of 54 GWh when fully expanded.
Impact of chip shortages spreading to EVs. While the semiconductor shortage has plagued the auto industry for well over a year, the EV industry seemed largely immune. That may be changing, as EV production halts have begun to occur more often, usually blamed on chip shortages, but now also on supply disruptions related to the war in Ukraine.&nbsp;Renault had to pause production&nbsp;of its all-electric Mégane E-Tech Electric brand in France for over 10 days recently. With chip shortages expected to last into 2024, their impact on EV production may expand which, combined with higher material and battery costs (and resulting higher vehicle costs), may temper the pace of growth of EVs globally.
Ag-Chem and Ag-Tech
Real world implications from the war in Ukraine. As expected, Russia’s invasion of Ukraine is having a catastrophic impact on the country’s ag sector. Government officials already warned that this year’s plantings may be down as much as 50%, perhaps more, as the result of the conflict. The latest&nbsp;planting updates&nbsp;from the region do not provide cause for optimism. And despite the heroism of the farmers that are getting out into the fields despite shelling, land mines, and&nbsp;shortages of everything from fuel to fertilizers, this year’s production may barely suffice for internal use, with longer term impact likely to be felt for years to come. Aside from the planting and production shortfall in Ukraine, the impact of sanctions and counter sanctions continue to be evaluated from the global perspective. And while American farmers may be&nbsp;less impacted by potential shortages of fertilizers, given that our needs are met largely by domestic or Canadian production, in Brazil, which imports 75-95% of its fertilizer needs, much of it from Russia and Belarus, price and availability may become a real issue for the region’s ag industry.
Availability of ag inputs. Given the importance of Brazil in the global market as a producer and exporter of row crops, acreage or yield declines due to unavailability of crop inputs can have devastating effects on global food security. On a positive note, a&nbsp;recent report by Reuters&nbsp;mentioned that least 24 vessels carrying almost 678,000 MT of Russian fertilizers will reach Brazil in the following weeks. However, with 11 of the 24 vessels leaving port after the February 24 start of hostilities, the flow of fertilizer from Russia into the country may slow, even as demand ramps up, leaving plenty of uncertainty in the market as to the ultimate production quantities that would be available for export. Speaking of Brazil, the&nbsp;country’s wheat industry saw a strong uptick in herbicide use in 2021, driven in part by growth in planted acres, but also by growing adoption of pre-harvest desiccation. Wheat being an important end-market for BIOX’s sales and a growth opportunity for MBII as it partners with BIOX to expedite its penetration of the LATAM market, we see this is a positive for the combined company, as well as for ag-chem majors like CTVA, BASF and Bayer.
As if the war and cost inflation wasn’t enough. While one would expect the conflict in Europe to disrupt production and shipping of fertilizers, Union Pacific’s limitations on fertilizer shipments in domestic markets is adding insult to injury.&nbsp;CF Industries’ notice of UP reducing shipments&nbsp;of its nitrogen and hydrogen products by 20% may impact the company’s ability to meet new or incremental demand, adding to availability concerns many farmers already face, not to mention likely contributing to higher fertilizer prices if alternative shipping arrangements are required. The one remaining silver lining is the&nbsp;continuing upward trend in grain prices, which suggest US farmers may still deliver strong results, even with higher costs of everything from fertilizers to crop protection chemicals, to fuel, to labor, to land.
Rating and Price Target Changes
ALB&nbsp;– RBC raised its price target (PT) to $276 from $275 and reiterated its Outperform rating.
ASH&nbsp;– Wells Fargo raised its PT to $113 from $105 while maintaining its Equal Weight recommendation; Mizuho also raised its PT to $136 from $129, reiterating its Buy rating.
AVNT&nbsp;– Wells Fargo raised its PT to $65 from $60 and reiterated its Overweight rating; Oppenheimer also raised its PT to $69 from $68 and reiterated its Outperform rating.
AXTA&nbsp;– Deutsche Bank downgraded the stock to Hold from Buy and lowered PT to $27 from $34; Wells Fargo reduced its PT to $27 from $32 and maintained its Equal Weight rating.
CMP&nbsp;– BMO raised its PT to $63 from $60 and maintained its Market Perform rating.
CTVA&nbsp;– RBC raised its PT to $67 from $57 and reiterated its Outperform rating.
EAF&nbsp;– RBC lowered its PT to $112 from $113 but reiterated its Outperform rating.
EMN&nbsp;– BofA downgraded the stock to Neutral from Buy and lowered its PT to $124 from $150; Wolfe Research downgraded the stock to Peer Perform from Outperform and lowered its PT to $114 from $130.
FMC&nbsp;– RBC raised its PT to $152 from $135 and reiterated its Outperform rating.
PPG&nbsp;– Wells Fargo lowered its PT to $140 from $170 and maintained its Equal Weight rating.
SHW&nbsp;– Wells Fargo lowered its PT to $275 from $315 and maintained its Equal Weight 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 24, 2022

<h2>KEY HIGHLIGHTS</h2>
<div></div>
<ul>
<li>WTR-CMI last week.&nbsp;While the broader Russell 2000 index barely held its own (0.2%), the large-cap S&amp;P 500 index fell more (2.4%). Conversely, our WTR-CMI index of chemicals and materials technology companies delivered a 0.9% gain for the week. While the index’s YoY performance is still down 4.9%, it is well ahead of the (7.8%) returns for the S&amp;P 500 and (10.7%) for the Russell 2000.</li>
<li>Winners and losers. WTR-CMI’s performance last week was led by AVD’s 10.3% jump, as the company benefited from positive demand and pricing dynamics in the ag market. KOP’s 9.3% appreciation broke a month-long trend of declining stock price. ASH’s&nbsp;positive preannouncement&nbsp;of F2Q22 (Mar-22) likely drove the stock’s 7.7% rally last week. At the other end, volatile LAC posted the steepest decline in our index with an 11.5% drop, followed by KWR’s (6.4%) and PPG’s (4.4%) performance. Margin concerns were the likely culprit of declines in PPG.</li>
<li>Late winter demand drives stronger salt volumes.&nbsp;Although the road-salt season got off to a slow start, more inclement weather events in Mar-Q appear to have driven positive volume growth for road salt at CMP,&nbsp;which updated its outlook for the quarter. The company also announced that it received the&nbsp;maximum earn-out payment&nbsp;of $18.5M for the business it sold last year.</li>
<li>Chip shortage continues to impact auto production. European plants appear to be particularly hit hard, with&nbsp;AutoForecast Solutions increasing its forecast&nbsp;for missed auto production by nearly 100K last week, mostly out of Europe. After losing 10.5M units last year, the industry may be on pace for another 2-plus million units under-produced this year, a number we believe may continue to get revised higher.</li>
<li>Commodity resin prices may be stabilizing. With exports still hampered by logistical bottlenecks, and with warehouses bulging with products as a result,&nbsp;PE and PP producers may be curtailing production&nbsp;even as they worked to secure $0.04-$0.10/lb price increases for March. With oil prices retreating from their March highs, resin prices may stabilize at current levels, allowing customers such as AVNT to catch up with price increases of their own, and restore margins as 2022 progresses.</li>
</ul>
<p>WTR-CMI WEEKLY PERFORMANCE</p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/269/583/original/image_71971076121650473739809.png?1650473742" class="editor-image img-responsive" data-smartkarma-image-id="269583"></figure>
<p>Source: YCharts * April 15 close</p>
<h2>Lithium &amp; EV Ecosystem Developments</h2>
<p>Auto companies continue to sign supply deals directly with metal producers. Recently GM, which is in the process of ramping up EV production,&nbsp;<a href="https://carsinsiders.com/2022/04/12/gm-ramping-up-for-ev-production-reaches-cobalt-supply-deal-with-miner-glencore/" target="_blank" rel="noopener">signed a supply deal with Australian miner </a>Glencore&nbsp;(OTC: GLNCY) to ensure its supply of cobalt—a material critical to EV battery production. Looking to do the same (secure critical metal supply), Ford announced the&nbsp;signing of a supply deal with Lake Resources&nbsp;(OTC: LLKKF), under which it will purchase 25K metric tonne of LCE (lithium carbonate equivalents) annually from Lake’s Argentinean mine.</p>
<p>More battery plant intentions announced. Joint-venture partners&nbsp;Stellantis and LG Energy Solutions announced&nbsp;a commitment to spend $4.1 billion to build Canada’s first large-scale EV battery plant in Windsor, Ontario. The plant is expected to begin operations in 2024 and will have an annual capacity of 45 GWh. Meanwhile, Japan-based EV battery maker Envision AESC Group&nbsp;announced plans to spend $2B&nbsp;to build a battery plant in Kentucky (its second plant in U.S.). The plant is expected to have an annual production capacity of 30 GWh, potentially rising to 40 GWh over time.</p>
<p>Flies in the ointment. While the EV market remains one of the few bright spots in the automotive industry, with&nbsp;China reporting a 150% YoY increase in new energy vehicles&nbsp;(NEV) sales in 1Q22, despite a 12% YoY drop in total new car sales in March and flattish 1Q22 overall, several challenges continue to impact the industry. We have often spoken about metal availability as a mid-term concern, although a&nbsp;report by McKinsey &amp; Co., suggests there will be enough lithium to meet EV demand through 2030, but we have also mentioned other factors that may impact near-term pace of EV consumer adoption. One such factor continues to be charging infrastructure. Public charging points&nbsp;continue to grow at a slower rate than EVs&nbsp;across the world, with China being the worst. That’s not surprising, given the high number of EVs being sold in the country and the government’s relatively less attention and abilities being focused on supporting the infrastructure. We continue to believe that at some point this imbalance will need to be addressed, if the NEV revolution is to fully take off. Another, long-acknowledged challenge to faster EV transition is the relatively higher cost of EVs vs. ICE vehicles. Higher EV production volumes and higher battery production volumes were expected to drive higher efficiencies and lower battery costs (the major factor in the cost difference of ICE vs. EV). However, supply concerns, logistics challenges and energy inflation are driving a sharp increase in battery prices instead. In fact,&nbsp;Korean battery manufacturers are expected to raise prices 40%&nbsp;over the next 2-3 years to offset higher metal and graphite costs and we’re fairly confident S. Korean players will not be the only ones raising prices. If that wasn’t enough, the continuing COVID-19-related lockdowns, particularly in China, are impacting near-term production of EVs, with Chinese EV manufacturer&nbsp;Neo announcing a production stop&nbsp;for lack of supplies, due to disruptions from Covid-19-driven lockdowns. What’s even more concerning is that the company is unsure when production would resume.</p>
<h2>Ag-Chem and Ag-Tech</h2>
<p>Welcome regulatory changes coming. A bill&nbsp;pending in the Brazilian Senate&nbsp;will modernize and update regulations around research, experimentation, labeling, registration, and classification, through storage and transport, to commercialization, control, inspection, and disposal of packaging for pesticides used in the country’s agricultural sector. Proponents believe the Bill, if passed and enacted, will allow newer, more efficacious, and less-expensive products into the country’s ag sector, streamlining the approval process from as long as 8 years to 1-2 years, typical for other jurisdictions. Closer home, the&nbsp;EPA released a workplan&nbsp;to protect endangered species from pesticides, while ensuring the products are available for farmers to use. According to the EPA, the current pesticide approval system has major drawbacks that make the process of complying with Endangered Species Act (ESA) ‘unsustainable and legally tenuous’. It currently has a backlog of nearly 20 years in pending litigation or court-enforceable deadlines covering over 1,000 pesticide products related to the ESA. We believe both these developments are a positive for the ag-chem industry and its participants, whether Tier-I players such as CTVA and FMC, or emerging bio-based crop protection companies, such as MBII, as it may lower registration and litigation costs for the former and speed up the uptake of bio-based alternatives to synthetic chemical pesticides for the latter.</p>
<p>War in Ukraine a cause for growing concern. We have previously highlighted Ukraine’s major role as a producer and exporter of ag products, particularly wheat, seed oil, and corn. With the planting season underway in the Northern Hemisphere,&nbsp;concerns are growing over the country’s ability to meet even its internal needs, let alone support its export customers. Even getting crop inputs, such as pesticides and fertilizers, into the country is getting increasingly problematic, while planting, let alone harvesting abilities, remain under question.</p>
<p>Use less, save more. The sky-high costs of fertilizers are driving increasing resources into developing products and processes to reduce the volume of these inputs needed to generate acceptable yields. From using manure (discussed in last week’s Mat-Chem Notes) as a substitute to developing bio-based solutions to fix nitrogen in the soil, or prevent its loss in the plant,&nbsp;significant research and commercialization efforts are underway. Making greater use of&nbsp;seed treatment&nbsp;as a way to improve yields may also be gaining traction, even among farmers that did not fully take advantage of the technology in the past. High chemical fertilizer prices are also providing an opening for&nbsp;bio-based fertilizers&nbsp;and soil treatment products to gain traction in the market. Again, we se this as a strong positive driver for MBII, as well as Argentinean-based Bioceres (NASDAQ: BIOX).</p>
<h2>Rating and Price Target Changes</h2>
<p>ASH&nbsp;– Deutsche Bank raised its price target (PT) to $120 from $115 and reiterated its Buy rating.</p>
<p>CTVA – Loop Capital upgraded the stock to Buy from Hold with $69 PT; Vertical Research downgraded the stock to Hold from Buy, while keeping its $58 PT.</p>
<p>EMN&nbsp;– RBC reduced its PT to $116 from $125, maintaining its Sector Perform rating.</p>
<p>FMC&nbsp;– CFRA downgraded the stock to Sell from Hold and maintained its $126 PT; likewise, Loop Capital downgraded the stock to Hold from Buy with PT of $140.</p>
<p>FUL&nbsp;– Following the company’s Investor Day, Baird upgraded the stock to Outperform from Neutral, keeping its $85 PT unchanged.</p>
<p>RPM&nbsp;– BMO lowered its PT to $111 from $115 and reiterated its Outperform rating.</p>
<p>SHW – Mizuho lowered its PT to $310 from $350, reiterating its Buy recommendation.</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;While the broader Russell 2000 index barely held its own (0.2%), the large-cap S&amp;P 500 index fell more (2.4%). Conversely, our WTR-CMI index of chemicals and materials technology companies delivered a 0.9% gain for the week. While the index’s YoY performance is still down 4.9%, it is well ahead of the (7.8%) returns for the S&amp;P 500 and (10.7%) for the Russell 2000.
Winners and losers. WTR-CMI’s performance last week was led by AVD’s 10.3% jump, as the company benefited from positive demand and pricing dynamics in the ag market. KOP’s 9.3% appreciation broke a month-long trend of declining stock price. ASH’s&nbsp;positive preannouncement&nbsp;of F2Q22 (Mar-22) likely drove the stock’s 7.7% rally last week. At the other end, volatile LAC posted the steepest decline in our index with an 11.5% drop, followed by KWR’s (6.4%) and PPG’s (4.4%) performance. Margin concerns were the likely culprit of declines in PPG.
Late winter demand drives stronger salt volumes.&nbsp;Although the road-salt season got off to a slow start, more inclement weather events in Mar-Q appear to have driven positive volume growth for road salt at CMP,&nbsp;which updated its outlook for the quarter. The company also announced that it received the&nbsp;maximum earn-out payment&nbsp;of $18.5M for the business it sold last year.
Chip shortage continues to impact auto production. European plants appear to be particularly hit hard, with&nbsp;AutoForecast Solutions increasing its forecast&nbsp;for missed auto production by nearly 100K last week, mostly out of Europe. After losing 10.5M units last year, the industry may be on pace for another 2-plus million units under-produced this year, a number we believe may continue to get revised higher.
Commodity resin prices may be stabilizing. With exports still hampered by logistical bottlenecks, and with warehouses bulging with products as a result,&nbsp;PE and PP producers may be curtailing production&nbsp;even as they worked to secure $0.04-$0.10/lb price increases for March. With oil prices retreating from their March highs, resin prices may stabilize at current levels, allowing customers such as AVNT to catch up with price increases of their own, and restore margins as 2022 progresses.

WTR-CMI WEEKLY PERFORMANCE

Source: YCharts * April 15 close
Lithium &amp; EV Ecosystem Developments
Auto companies continue to sign supply deals directly with metal producers. Recently GM, which is in the process of ramping up EV production,&nbsp;signed a supply deal with Australian miner Glencore&nbsp;(OTC: GLNCY) to ensure its supply of cobalt—a material critical to EV battery production. Looking to do the same (secure critical metal supply), Ford announced the&nbsp;signing of a supply deal with Lake Resources&nbsp;(OTC: LLKKF), under which it will purchase 25K metric tonne of LCE (lithium carbonate equivalents) annually from Lake’s Argentinean mine.
More battery plant intentions announced. Joint-venture partners&nbsp;Stellantis and LG Energy Solutions announced&nbsp;a commitment to spend $4.1 billion to build Canada’s first large-scale EV battery plant in Windsor, Ontario. The plant is expected to begin operations in 2024 and will have an annual capacity of 45 GWh. Meanwhile, Japan-based EV battery maker Envision AESC Group&nbsp;announced plans to spend $2B&nbsp;to build a battery plant in Kentucky (its second plant in U.S.). The plant is expected to have an annual production capacity of 30 GWh, potentially rising to 40 GWh over time.
Flies in the ointment. While the EV market remains one of the few bright spots in the automotive industry, with&nbsp;China reporting a 150% YoY increase in new energy vehicles&nbsp;(NEV) sales in 1Q22, despite a 12% YoY drop in total new car sales in March and flattish 1Q22 overall, several challenges continue to impact the industry. We have often spoken about metal availability as a mid-term concern, although a&nbsp;report by McKinsey &amp; Co., suggests there will be enough lithium to meet EV demand through 2030, but we have also mentioned other factors that may impact near-term pace of EV consumer adoption. One such factor continues to be charging infrastructure. Public charging points&nbsp;continue to grow at a slower rate than EVs&nbsp;across the world, with China being the worst. That’s not surprising, given the high number of EVs being sold in the country and the government’s relatively less attention and abilities being focused on supporting the infrastructure. We continue to believe that at some point this imbalance will need to be addressed, if the NEV revolution is to fully take off. Another, long-acknowledged challenge to faster EV transition is the relatively higher cost of EVs vs. ICE vehicles. Higher EV production volumes and higher battery production volumes were expected to drive higher efficiencies and lower battery costs (the major factor in the cost difference of ICE vs. EV). However, supply concerns, logistics challenges and energy inflation are driving a sharp increase in battery prices instead. In fact,&nbsp;Korean battery manufacturers are expected to raise prices 40%&nbsp;over the next 2-3 years to offset higher metal and graphite costs and we’re fairly confident S. Korean players will not be the only ones raising prices. If that wasn’t enough, the continuing COVID-19-related lockdowns, particularly in China, are impacting near-term production of EVs, with Chinese EV manufacturer&nbsp;Neo announcing a production stop&nbsp;for lack of supplies, due to disruptions from Covid-19-driven lockdowns. What’s even more concerning is that the company is unsure when production would resume.
Ag-Chem and Ag-Tech
Welcome regulatory changes coming. A bill&nbsp;pending in the Brazilian Senate&nbsp;will modernize and update regulations around research, experimentation, labeling, registration, and classification, through storage and transport, to commercialization, control, inspection, and disposal of packaging for pesticides used in the country’s agricultural sector. Proponents believe the Bill, if passed and enacted, will allow newer, more efficacious, and less-expensive products into the country’s ag sector, streamlining the approval process from as long as 8 years to 1-2 years, typical for other jurisdictions. Closer home, the&nbsp;EPA released a workplan&nbsp;to protect endangered species from pesticides, while ensuring the products are available for farmers to use. According to the EPA, the current pesticide approval system has major drawbacks that make the process of complying with Endangered Species Act (ESA) ‘unsustainable and legally tenuous’. It currently has a backlog of nearly 20 years in pending litigation or court-enforceable deadlines covering over 1,000 pesticide products related to the ESA. We believe both these developments are a positive for the ag-chem industry and its participants, whether Tier-I players such as CTVA and FMC, or emerging bio-based crop protection companies, such as MBII, as it may lower registration and litigation costs for the former and speed up the uptake of bio-based alternatives to synthetic chemical pesticides for the latter.
War in Ukraine a cause for growing concern. We have previously highlighted Ukraine’s major role as a producer and exporter of ag products, particularly wheat, seed oil, and corn. With the planting season underway in the Northern Hemisphere,&nbsp;concerns are growing over the country’s ability to meet even its internal needs, let alone support its export customers. Even getting crop inputs, such as pesticides and fertilizers, into the country is getting increasingly problematic, while planting, let alone harvesting abilities, remain under question.
Use less, save more. The sky-high costs of fertilizers are driving increasing resources into developing products and processes to reduce the volume of these inputs needed to generate acceptable yields. From using manure (discussed in last week’s Mat-Chem Notes) as a substitute to developing bio-based solutions to fix nitrogen in the soil, or prevent its loss in the plant,&nbsp;significant research and commercialization efforts are underway. Making greater use of&nbsp;seed treatment&nbsp;as a way to improve yields may also be gaining traction, even among farmers that did not fully take advantage of the technology in the past. High chemical fertilizer prices are also providing an opening for&nbsp;bio-based fertilizers&nbsp;and soil treatment products to gain traction in the market. Again, we se this as a strong positive driver for MBII, as well as Argentinean-based Bioceres (NASDAQ: BIOX).
Rating and Price Target Changes
ASH&nbsp;– Deutsche Bank raised its price target (PT) to $120 from $115 and reiterated its Buy rating.
CTVA – Loop Capital upgraded the stock to Buy from Hold with $69 PT; Vertical Research downgraded the stock to Hold from Buy, while keeping its $58 PT.
EMN&nbsp;– RBC reduced its PT to $116 from $125, maintaining its Sector Perform rating.
FMC&nbsp;– CFRA downgraded the stock to Sell from Hold and maintained its $126 PT; likewise, Loop Capital downgraded the stock to Hold from Buy with PT of $140.
FUL&nbsp;– Following the company’s Investor Day, Baird upgraded the stock to Outperform from Neutral, keeping its $85 PT unchanged.
RPM&nbsp;– BMO lowered its PT to $111 from $115 and reiterated its Outperform rating.
SHW – Mizuho lowered its PT to $310 from $350, reiterating its Buy recommendation.
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 17, 2022

United States

Eastman Chemical Company is an international chemical company which produces chemicals, fibers, and plastics.  The Company's operations include coatings, adhesives, specialty polymers, and Inks, fibers, performance chemicals and intermediates, performance polymers, and specialty plastics.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Eastman Chemical Co (EMN US)

Mat-Chem Notes for the Week Ended July 17, 2022

KEY HIGHLIGHTS WTR-CMI last week. While both broad market indexes declined last week, with the S&P 500 and the Russell 2000 down 0.9% and...

Water Tower Research

Mat-Chem Notes for the Week Ended July 3, 2022

KEY HIGHLIGHTS WTR-CMI last week. After a dead cat bounce the previous week, last week saw the market resume its sell-off, with the S&P...

Water Tower Research

Mat-Chem Notes for the Week Ended June 5, 2022

KEY HIGHLIGHTS WTR-CMI last week. For the second week in a row, the market posted positive gains for the week, with the Russell 2000 leading with...

Water Tower Research

Mat-Chem Notes for the Week Ended April 24, 2022

KEY HIGHLIGHTS WTR-CMI last week. In what was a down week for the market overall, our WTR-CMI index of 30 chemicals and materials technology...

Water Tower Research

Mat-Chem Notes for the Week Ended April 17, 2022

KEY HIGHLIGHTS WTR-CMI last week. While the broader Russell 2000 index barely held its own (0.2%), the large-cap S&P 500 index fell more...

Water Tower Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)