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On Wednesday, Jefferies analyst Charlie Bentley adjusted the price target for Croda International (LON:CRDA:LN) (OTC: COIHY), reducing it from GBP50.00 to GBP46.00 while maintaining a Buy rating on the stock. The revision comes ahead of the company’s first-quarter sales report, which is anticipated on April 23, 2025. The stock is currently trading near its 52-week low, and InvestingPro analysis suggests the shares are undervalued at current levels.
Bentley anticipates Croda International to post revenues of GBP417 million, which is slightly below the consensus estimate of GBP428 million. For context, the company generated revenues of $2.04 billion in the last twelve months, with a healthy gross margin of 45%. Despite the revised price target, the analyst has made virtually no changes to the earnings forecasts for the company. The new price target takes into account peer multiples and discounted cash flow (DCF) analyses, considering mid-term margins.
The analyst notes that improving asset utilization and addressing the level of under-earning in Croda’s core business could provide a significant boost to earnings—potentially greater than 25%. This assessment is based on the company’s historical performance ranges and the potential for better earnings leverage.
Moreover, Bentley highlights that Croda’s valuation multiples are currently at multi-year lows compared to its peers, suggesting that the stock may be undervalued. The upcoming quarterly sales report will likely offer further insight into the company’s financial performance and its position within the industry.
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