Croda Announces Strategic Review for Its Industrial Businesses; Likely Positive for Moat and Value

Narrow-moat Croda announced a strategic review for its performance technologies and industrial chemicals segments, which are the parts of Croda’s business portfolio that are focused on industrial end markets. Full or partial divestment will be considered as part of the review, which is expected to be completed by the end of 2021. We maintain our GBX 4,600 fair value estimate but view full divestment of these businesses as likely positive for the moat and valuation. However, this certainly wouldn’t close the gap to the current stock price as shares are trading in 1-star territory.