Broker snap: UBS downgrades Croda to 'sell'

12th Apr 2013 10:22

UBS has lowered its recommendation for chemicals group Croda International from 'neutral' to 'sell', saying that it is awaiting evidence of growth.The broker explained that Croda has enjoyed a 12-month re-rating from trading at 16 times consensus 2013 earnings to 20 times and is now on part with Procter & Gamble, following the trail of consumer staples.UBS said: "That said, this was accompanied by largely flat/declining earnings (only one clean beat over past seven results releases). "We believe Croda therefore needs to at least deliver consistent growth or regain momentum."The company operates in several markets, producing a wide portfolio of oleochemical and speciality products. Industries it works in include personal care, health care, coatings and polymers and industrial chemicals.The broker said that Croda is a "high-quality" business competing in a tough segment.The target price has been raised from 2,340p to 2,550p.The stock was down 4.09% at 2,603p by 10:30 on Friday.BC