UBS ups ICI's earnings per share estimate

04 May 2007 11:17  [Source: ICIS news]

MUMBAI (ICIS news)--UBS on Friday said it upgraded ICI's 2007, 2008 and 2009 earnings per share (EPS) estimates by 2% in each year after the company's first-quarter results exceeded the bank’s forecast.

 

The brokerage said estimated EPS would be 33.22 pence in 2007, 37.52 pence in 2008 and 40.68 pence in 2009.

 

UBS said in a research note the upgrade reflected the UK coatings firm’s pre-tax profits of £89m ($177m) that were announced on Thursday and which were above UBS’ forecast of £83m.

 

ICI’s net income was 5% ahead of forecasts, mainly driven by a 17% year-on-year increase in profits at ICI’s paints division and 16% growth in its starches segment. UBS said lower finance costs also drove the improved performance.

 

The brokerage maintained its “neutral 2” rating on ICI as well as its £5.65 target share price on the company’s stock.

 

According to UBS analysts, the UK chemicals market was expected to compensate for the weak environment in the US paints market, allowing for higher profits year on year.

 

The brokerage said the specialty starches margins were likely to be lower in the second half of the year, however, due to rising costs of raw materials such as corn.

 

ICI shares rose 2.50% to £5.35 on the London Stock Exchange on Friday at 8:38 GMT, from £5.32 at yesterday’s close.

 

($1 = £0.50)

 

By: Aarti Kapoor
+65 6780 4359

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