Goldman Sachs maintains neutral rating for Cytec

03 July 2008 18:49  [Source: ICIS news]

NEW YORK (ICIS news)--Goldman Sachs has maintained its “neutral” rating on US aerospace-materials producer Cytec Industries, although it downgraded its rating on the aerospace sector, the investment firm said on Thursday.

The investment bank cut its rating on the aerospace sector from “neutral” to “cautious,” citing “deterioration in airline fundamentals owing to slower US GDP growth and rapid escalation in oil prices”.

The Goldman Sachs aerospace team expects “precipitous order drops in 2009-2010, reflecting continued airline capacity reductions and possible downward revisions for consensus production rate forecasts based on recent channel checks”.

However, analyst Robert Koort maintained his “neutral” rating on Cytec as he expects demand for Cytec’s composite materials to peak from the second half of 2008 through the first half of 2010.

“Moreover, we expect this business to largely sustain its growth momentum post peak, on the back of a reasonably strong backlog, accelerating demand from Asia and the Middle East, further ramp-up of military projects and secular trends in favour of increasing composite applications,” Koort said.

The analyst expects Cytec’s earnings/share to rise from $3.91 (€2.46) in 2007 to $4.40 in 2008, $4.85 in 2009 and $5.40 in 2010.

($1 = €0.63)

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By: Joseph Chang
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