Analyst Bernstein lowers forecasts for Germany's Bayer, BASF

09 October 2012 12:03  [Source: ICIS news]

LONDON (ICIS)--Bernstein Research has lowered its performance forecasts for German chemicals majors BASF and Bayer for 2013 because of low operating rates, the analyst said on Tuesday.

The company cut BASF’s earnings per share (EPS) growth forecast for 2013 to 7% from 15%, while reducing Bayer’s EPS growth forecast to 10% from 12%.

"As we look to 2013, we expect ongoing low operating rates will translate into little margin improvement," Bernstein said in a an analyst note.

Bernstein predicted that both companies would perform in line with the broader chemical industry, although it was slightly more bearish on BASF than Bayer.

The firm gave BASF a target share price of €61 ($79). The analyst said it remains cautious for BASF as a result of weak macroeconomic outlook and low operating rates across the chemicals business. At 10:38 GMT, BASF shares were trading at €64.81 on Germany’s Xetra stock exchange.

Bayer received a target share price of €67 per share, driven by a strong predicted operational performance for the company’s Bayer MaterialScience subsidiary through 2012 and beyond. Bayer shares were trading at €67.97 at 10:38 GMT on Germany’s Xetra stock exchange.

The niche commodities produced by BASF Plastics and Bayer MaterialScience are expected to show stronger improvements than the companies’ more general petrochemical businesses, Bernstein said, which it attributed to their dominance in those smaller markets.

($1 = €0.77)

By: Tom Brown
+44 208 652 3214

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