28 March 2012 10:55 [Source: ICIS news]
LONDON (ICIS)--Bernstein Research expects Dutch paints and coatings producer AkzoNobel to see margin expansion in 2012, due to prices keeping ahead of raw material cost inflation, the global analyst said on Wednesday.
“We expect prices to more than offset slowing raw material cost inflation in 2012. As a result, we expect margin expansion in all three of Akzo’s segments in 2012 and 2013,” Bernstein said.
“We expect the majority of raw material cost inflation to come from the decorative paints division (+15%) in 2012,” it added.
Bernstein said it anticipates lower inflation in AkzoNobel’s performance coatings (+3%) and specialty chemicals (+3%) segments.
The analyst said it estimates a 7% rise in raw material cost inflation in 2012.
“Our estimated inflation translates into an earnings before interest, tax, depreciation and amortisation (EBITDA) impact of about -€492m, [approximately] 50% less than the headwind in 2012,” it added.
Bernstein rates AkzoNobel “Outperform” with a target price of €53.
In February, AkzoNobel reported a net loss of €68m ($91m) in the fourth quarter of 2011, compared with a profit of €162m in the same period a year earlier.
($1 = €0.75)
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