Croda Drops Most in a Year as UBS Advises Selling: London MoverPatrick Winters
Croda International Plc, the world’s second-largest cosmetic-ingredient maker, fell the most in a year after UBS AG downgraded the stock and called for more consistent earnings growth.
Croda declined 3.9 percent to 2,608 pence at the close in London, the second-worst performance today among stocks on the FTSE 100 Index. Johnson Matthey Plc, a larger maker of specialty chemicals, led the index of the U.K.’s largest 100 publicly traded companies, rising 2.7 percent after UBS upgraded the shares to buy from neutral.
Croda’s stock advance over the last year was accompanied largely by flat or falling earnings, UBS analyst Thomas Gilbert wrote in a note downgrading the shares to sell from neutral. The Snaith, England-based company “needs to at least deliver consistent growth or regain momentum,” as growth in consumer-care materials has fallen below the market trend, he said.
The global market for beauty products expanded 4.6 percent in 2012, led by L’Oreal, Procter & Gamble Co. and Unilever, and the ranks of emerging and wealthy middle classes are expected to almost triple to 2.7 billion consumers by 2020, according to Bloomberg Industries analyst Deborah Aitken. Croda’s products are used in sunblock, skin creams and hair treatments.
Croda, which joined the U.K.’s benchmark stock index last year, rose 31.7 percent in 2012 as it reported record fourth-quarter profit from skin-care formulations. Today’s decline pared the company market value to 3.65 billion pounds ($5.61 billion), compared with 4.95 billion pounds for Johnson Matthey.