UBS ups Solvay 2007-09 REBIT estimates

15 May 2007 16:29  [Source: ICIS news]

MUMBAI (ICIS news)--UBS on Tuesday raised its recurring earnings before interest and tax (REBIT) estimates for Solvay for 2007-2009 saying it was positive on its cyclical earnings in chemicals and plastics in the short-term.

 

REBIT forecasts were increased by 3% in 2007 and 2008 and by 5% in 2009. The company's share price target was raised to €117 ($159) from €108. 

 

The bank's analysts said in a note to clients that although they expected margins in 2007-2009 to decline in plastics and chemicals, the peak profitability in European caustic and polyvinyl chloride (PVC) was expected to extend until 2009.

 

The analysts added that risks to their estimates remained in pharmaceuticals after REBIT was in line despite R&D spending being below the targeted quarterly run rate.

 

UBS said it expected the company to make an acquisition in the pharmaceutical business within the next 12-18 months that could allow for a better product mix.

 

The analysts retained their Reduce 2 rating on the stock.

 

The Belgian pharmaceuticals and chemicals company's share fell 1.63% to €116.05 at 14.26 GMT on Tuesday.

 

($1 = €0.74)

By: Isha Jha
+65 6780 4359

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