UBS has reiterated its Buy rating on Croda International, with a projected pre-tax profit of £131 million for the second half of 2024, which is approximately 2% above market consensus.
The firm has set a price target of £51.00 for the specialty chemicals company, which is currently trading near its 52-week low at $20.87. This positive forecast comes ahead of Croda's upcoming earnings report, scheduled for February 25, 2024, and suggests that the company is poised to exceed market expectations.
Croda's strong fundamentals, including a robust gross margin of 43.86% and solid financial health rating, could support its stock price recovery. UBS analysts expect Croda's fourth-quarter sales to reach £438 million, reflecting a more favorable outlook regarding foreign exchange impacts. The forecast also includes an adjusted operating profit of £143 million for the second half of 2024. The anticipated organic sales growth for the fourth quarter is projected at 5.3%, driven by an increase in volume and stable pricing.
Croda International has a track record of maintaining dividend payments for 33 consecutive years, demonstrating its commitment to consistent shareholder returns. The company's current price-to-earnings (P/E) ratio stands at 28.5x, supported by its strong financial metrics and growth potential. Croda's upcoming earnings report will provide valuable insights into its operational performance and strategic direction.