Goldman Sachs has reiterated a 'buy' recommendation on Croda International, reducing its price target to 3150p from 3340p. This still provides over 45% upside on its current price of approximately 2160p.

Following slightly disappointing third quarter results from the specialty chemicals company, Goldman analysts have lowered their earnings per share (EPS) forecasts for 2012-14 by 4% with nearly half of the reduction being a result of foreign exchange movements.

However, they believe "Croda is exposed to some of the strongest
structural growth themes (e.g consumer care) within the sector".

As a consequence they state: "We would view any weakness as an opportunity to buy a 2020 Vision Leader at a depressed valuation. Croda trades at 8.6 times 2014 estimates of EV/EBITDA [enterprise value/earnings before interest, tax, depreciation and amortisation] verses a historical average of 9.5 times, despite stronger returns relative to history."

Goldman Sachs' twelve-month price target moves to 3150p (from 3340p) and is based on 11.5 times 2014 estimates of EV/EBITDA.

CM

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Croda International (CRDA) share price