Croda International, the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Lisa De Neve from Morgan Stanley upgraded the rating on the stock to a Buy and gave it a p3,350.00 price target.
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Lisa De Neve has given his Buy rating due to a combination of factors, primarily Croda’s strong ability to defend profitability in an inflationary environment. She argues that Croda can pass higher raw material costs on to customers more quickly than peers, typically within a quarter, while its products form only a small share of customers’ total production costs. This pricing power, together with planned self-help measures that should deliver sizeable cost savings by FY26, underpins her view that margins and absolute profits can be protected.
Lisa De Neve’s rating is based on Croda’s attractive earnings outlook and risk profile versus other ingredient companies. She highlights that consensus forecasts for adjusted EPS to FY26 carry limited downside risk and that Croda now offers stronger like-for-like and EPS growth potential than most competitors. Reflecting higher pricing expectations and slightly improved FX assumptions, she raises her EPS estimates and nudges the price target higher, even while the valuation discount to Croda’s own historical multiples leaves further upside, in her view.
In another report released today, UBS also maintained a Buy rating on the stock with a p4,300.00 price target.