(Sharecast News) – Deutsche Bank has slashed its target price for Croda from 5,600p to 5,200p and maintained a ‘hold’ recommendation, saying it expects disappointing guidance from the speciality chemicals company at its next update.
“We have updated our model prior to the Q3 trading update which we expect to be announced within the next two weeks,” Deutsche Bank said.
Analysts expect management to “narrow down if not slightly lower” the guidance range for full-year underlying pre-tax profit, previously forecast at between £370m and £400m.
Deutsche Bank had already sat below guidance with a £365m estimate and so have left it unchanged. However, forecasts for the next two years have been cut by 7-8% “mainly due to lower expected earnings in Life Sciences (due to lower lipid sales/earnings)”, the bank said.
The stock trades at 23 times forward earnings after derating materially – shares are down nearly 30% since the start of 2023 – but Deutsche Bank still doesn’t see any upside.
“With ongoing volume volatility in Consumer Care and a lack of visibility, we struggle to see value even at the current multiple. Hold.”
The stock was down 0.3% at 4,685p on Thursday afternoon.
