Balanced Outlook on Croda International: Hold Rating Amidst Growth and Cost Challenges

Isha Sharma, an analyst from Stifel Nicolaus, maintained the Hold rating on Croda International (CRDA – Research Report). The associated price target is p3,900.00.

Isha Sharma has given his Hold rating due to a combination of factors influencing Croda International’s financial outlook. The company’s guidance for profit before tax in FY25 is set at a range that suggests a stable yet cautious growth expectation, with operational efficiencies anticipated to counterbalance inflationary pressures. Despite the reasonable guidance, there is an expectation of slight downward revisions in consensus estimates.
Additionally, while Croda is targeting significant cost savings over the next two years, with a focus on offsetting inflation and investment costs, the impact of these savings is tempered by associated one-off costs. The Life Sciences segment showed promising volume growth, but pricing pressures remain a concern. Meanwhile, the Consumer Care segment’s performance was mixed, with some areas outpacing peers but affecting the overall product mix. These factors collectively contribute to the Hold rating, reflecting a balanced view of potential risks and opportunities.

In another report released today, Citi also maintained a Hold rating on the stock with a £35.50 price target.