21 November 2008 14:56 [Source: ICIS news]
TORONTO (ICIS news)--Citigroup has slashed target prices and profit estimates for five US chemicals majors due to massive global destocking in the chemical supply chain, it said on Friday.
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Citigroup believed that other large-cap global chemical companies would face similar headwinds, given the sharp deterioration in already weakened markets such as autos, construction and textiles, it said.
“We had previously forecasted a 10% ‘base case’ earnings decline for bellwether chemical companies such as DuPont, but are now moving to a 20-25% assumption,” the bank said.
Analysts cut Celanese’s target price to $9 from $28, their 2008 earnings per share (EPS) estimate to $3.14 from $3.53 and their 2009 EPS estimate to $1.78 from $2.98.
The bank also was downgraded the shares to “hold” from “buy”.
DuPont’s target price was cut to $23 from $36, its 2008 EPS estimate to $3.18 from $3.33 and the 2009 estimate to $2.51 from $3.01.
Citigroup’s target price for Dow Chemical’s target prices is now $17, down from $26. The 2008 EPS estimate was cut to $2.65 from $2.82, and the 2009 estimate to $2.09 from $2.40.
Eastman’s target price was cut to $30 from $42, but Citigroup retained its EPS estimates at $5.26 and $4.18 for 2008 and 2009 respectively.
Analysts cut PPG Industries’ target price to $39 from $54. They reduced their 2008 EPS estimate to $5.00 from $5.14 and their 2009 estimate to $4.00 from $4.90.
For more on BASF, Celanese, Dupont, Dow Chemical, Eastman Chemical, LyondellBasell and PPG Industries visit ICIS company intelligence
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