Broker snap: UBS raises numbers at Croda

12th Jul 2011 11:33

UBS has hiked its target price for speciality chemicals group Croda by 17% from 1,900p to 2,220p, saying that the group has "many attractive qualities"."Croda is in an extremely attractive position, supplying renewable products in a typically petrochemical industry. We expect that the shift towards 'green' will continue to drive demand and profitability," the Swiss broker said.Ahead of the group's second quarter results due on 28 July, UBS has raised its earnings per share (EPS) forecasts for the year ending 31 December 2011 by 1.8% to 121.4p. EPS estimates for the following two years (ending 2012 and 2013) are upped by 5.6% to 137.4p and by 7.1% to 154.5p, respectively."We continue to like Croda as one of our top UK mid-cap picks, with exposure to renewable raw materials, gains in market share, capacity expansions (c5% vol growth), proactive price increases (strong pricing power), margin improvement in Industrials Specialties, and healthy returns to shareholders (share buybacks)."A buy recommendation is maintained.BC