Analysts at Deutsche Bank raised their target price on miner Glencore from 450.0p to 500.0p on Wednesday after the firm reported “solid results” earlier in the day.
Deutsche Bank’s Liam Fitzpatrick noted that Glencore beat on underlying earnings, net debt and shareholder returns.
However, the analyst said the key highlight in the group’s report was the announcement that it expects to resolve all of its existing US, UK and Brazilian regulatory investigations in 2022 and has recognised a provision of $1.5bn representing expected total fines and costs.
While Fitzpatrick stated the detailed conclusions from the investigations were yet to be released, he views the announcement as “a major positive”.
“Alongside the recent change in the senior leadership team, it should allow the market to look beyond the regulatory/legal issues of the past,” said DB, which reiterated its ‘buy’ rating on the stock.
Analysts at JPMorgan reiterated their ‘underweight’ stance on shares of Croda, telling clients that the strong growth seen in 2021 did not reflect a step-change in its long-term growth prospects.
JPMorgan argued the growth was chiefly driven by a temporary boost from Covid-19 vaccines, on top of a cyclical recovery.
Although JPM did bump up its estimates for the specialty chemicals manufacturer’s earnings per share in 2022 and 2023 slightly, its estimates remained 5.3% and 14.2% below the consensus for those two years, respectively.
Factoring in the announced sale of the bulk of its stake in its performance technologies and industrial chemicals business, JPM said the shares were changing hands on an estimated 2022-2023 price-to-earnings multiple of 33.4 and 37.0, respectively – compared to median levels of 29.9 and 23.3 over the past three and five years.
JPMorgan also stood by its 6,600.0p target price for Croda’s shares.
