2023 muted year for European industrial & consumer chemicals - Bernstein
10/03/2023 11:30
** Bernstein expects 2023 to be a muted year for European
industrial & consumer chemicals with lower organic growth, and
contribution from pricing being slightly higher than volumes
** The brokerage expects low to mid-single digit quarterly
growth with H2 2023 performing better than first six months on
the year
** It sees weaker volumes from 2022 continuing in H1 2023
but with a gradual recovery, in line with what most companies
guided
** However, in contrast to some companies' guidance, the
broker expects raw material inflationary pressures to diminish
in H1 2023 with a mild deflation setting in during H2 2023
** Novozymes NZYMb.CO , DSM DSMN.AS , International
Flavors & Fragrances IFF.N , all three "outperform"-rated, are
the broker's top picks in the consumer space
** Valuations of BASF BASFn.DE , Evonik EVKn.DE remain
depressed because of factors beyond their control, it says, but
keeps both at "outperform"
** Bernstein maintains "market-perform" rating on Croda
CRDA.L and Symrise SY1G.DE , citing fuller valuations for
these "high quality businesses"
** It keeps "underperform" view on Givaudan GIVN.S , which
continues to be under pressure, with a low-single digit increase
in food and beverage (F&B), and a mid-single digit rise in
household and personal care (HPC)
(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))