Broker snap: UBS ups estimates for Elementis

27th Apr 2012 11:21

UBS has raised its target price for FTSE 250 chemicals group Elementis after yesterday's strong first-quarter update revealed a 'solid start to the year'.Trading for the first three months of 2012 was ahead of the same period last year, the firm said. This reflected excellent progress in a number of key markets, including North America, which more than offset a fall in business in Europe, the company said.UBS has raised its 2012 and 2013 full-year earnings per share (EPS) forecasts by 5% to 23.5 cents and by 7.5% to 24.6 cents, respectively.The broker notes that the Chromium plant continues to report exceptional results, running at 100% utilisation rates in 2012, while margins have stayed at the "stunning" levels seen in the second half of last year (25-26%).UBS maintains its buy recommendation for the stock, noting that shares are trading at 13 times 2012 earnings, versus the UK chemical peer group multiple of 14.3. The target price is lifted from 200p to 220p.BC