Bernstein predicts muted year for consumer chemicals
15/05/2023 12:43
** Bernstein expects a muted year with lower organic growth
for consumer chemical companies in 2023, with almost all of it
from pricing
** In contrast to some companies' comments, the brokerage
expects raw material inflation to diminish in H1 with a mild
deflation setting in during H2
** It sees +2.4% organic sales growth in 2023, of which
+1.9% will be from pricing
** The broker also points to weaker H1 volumes and expects
gradual recovery in the latter half of the year
** Novozymes NZYMb.CO , International Flavors & Fragrances
Inc IFF.N and DSM DSMN.AS (all "outperform") are the
broker's top picks in the consumer space
** Valuations of BASF BASFn.DE and Evonik EVKn.DE (both
"outperform") remain depressed due to factors beyond their
control, despite being the "star performers" of 2022, Bernstein
says
** It keeps "market-perform" on Croda CRDA.L and Symrise
SY1G.DE based on fuller valuations for "these high quality
businesses"
** The broker maintains "underperform" on Givaudan GIVN.S
on North America logistics concerns, saying the current
portfolio and leverage makes it very hard for the Swiss group to
keep pace with flavours & fragrances peers over the longer term
(Reporting by Marta Frackowiak)
((marta.frackowiak@thomsonreuters.com))