19 October 2006 11:36 [Source: ICIS news]
LONDON (ICIS news)--UBS cut its price target for Dutch chemicals group Akzo Nobel to €51 ($61.12) from €55 on Thursday following mixed results in the trial of schizophrenia drug asenapine.
UBS said in a report that if asenapine was not successful, Akzo would likely look at a separate trade-sell or spin-off despite management confirming it would sell its pharmaceuticals business, Organon, regardless of the drug’s success.
Recording a third quarter EBIT of €364m, Akzo fell short of UBS' predicted €377m, with the chemical business lagging behind expectations. EBIT for the chemical business was €6m short of the predicted €89m.
“With muted volume growth, the division could barely cope with higher raw materials and energy costs in spite of decent price increases,” said UBS.
Third quarter results in the coatings business were in line with the bank’s expectations, with EBIT increasing 13% to €161m.
The UBS report showed Akzo’s EBIT was likely to increase 30% between 2005 and 2010 to €1.5bn.
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