Swiss UBS lowers distributor Brenntag's price target

09 May 2013 10:24  [Source: ICIS news]

LONDON (ICIS)--UBS on Thursday lowered Brenntag’s yearly price target to €140 ($184), driven by cuts to the Swiss investment bank’s near-term forecasts for the chemical distributor’s earnings per share (EPS).

However, UBS held Brenntag’s stock with a “Buy” rating, as the bank still sees the Germany-based distributor’s long-term value drivers still intact.

“We slightly reduce our DCF [discounted cash flow]-derived price target to €140 (from €145), driven by minor cuts to our near-term forecasts (-4.2%, -4.7%, and -4.2% to FY [full year] 13/14/15e EPS),” UBS said.

“We still see the longer-term drivers of structural growth, margin expansion, and stable cash generation as intact, and still expect margins, growth, and returns to improve over the course of 2013,” the investment bank added.

On Wednesday, Brenntag announced its first-quarter net profit had declined by 11.8% year on year to €69.7m, despite a 1.4% increase in sales to €2.42bn.

Brenntag CEO Steven Holland said: “The global economic situation is even more demanding and economic development is still muted.”

($1 = €0.76)

By: Franco Capaldo
+44 (0)20 8652 3214

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