The Globe and Mail reports in its Friday, May 15, edition that Desjardins Securities analyst David Newman expects Chemtrade Logistics Income Fund to benefit from a resiliency in water-treatment chemicals and a "strong" rebound in caustic soda price in 2020. The Globe's David Leeder writes in the Eye On Equities column that Mr. Newman, however, warns of "significant" near-term headwinds in the chemicals sector stemming from COVID-19 and the accompanying recessionary conditions. Accordingly, Mr. Newman lowered his share target to $6.50 from $7.50, while maintaining a "hold" rating. Analysts on average target the shares at $6.97. On Tuesday, it reported better-than-anticipated first quarter results with earnings before interest, taxes, depreciation and amortization of $81-million exceeding the projections of both Mr. Newman ($72-million) and the Street ($75-million). He says in a note: "This was driven by lower merchant acid volumes offset by higher selling prices, weak regen acid, resilient water products, and a decline in chlor-alkali prices offset by improved chlorine demand. Overall, COVID-19 impacts were not significant in 1Q20 but are expected to be more pronounced in 2Q and 3Q, followed by a recovery in 4Q."
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