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Croda International PLC CRDA

Morningstar Rating
GBX 4,703.00 −9.00 (0.19%)
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Company Report

Croda: Sales Weakness Was Broadly Expected and Should Improve Sequentially; Shares Attractive

Narrow-moat Croda reported a 10% decline in first-quarter 2024 constant-currency sales. This was primarily driven by the crop protection business, which faced a strong comparison base from the first quarter of last year, ahead of widespread customer destocking that drove volumes materially lower for 2023. Still, since much of this weakness and its phasing was already baked into the guidance shared at the beginning of the year; management confirmed the 2024 outlook for adjusted operating profit between GBP 260 million and GBP 300 million. We don’t expect to make any material change to our forecast and confirm our GBX 5,500 fair value estimate. We view shares as undervalued at current levels.

Price vs Fair Value

CRDA is trading at a 371% premium.
Price
GBX 4,712.00
Fair Value
GBX 5,764.00
Uncertainty
Medium
1-Star Price
GBX 9,656.00
5-Star Price
GBX 5,438.00
Economic Moat
Thmcwn
Capital Allocation
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Bulls Say, Bears Say

Bulls

Croda aims to consistently improve its portfolio mix toward the higher end of the quality spectrum in all the market niches in which it plays, which should bode well for a further reduction in cyclicality and margin improvement.

Bears

Croda was late to develop its business in emerging markets compared with peers, which may reduce its competitiveness in these higher-growth areas.

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Trading Information

Previous Close Price
GBX 4,712.00
Day Range
GBX 4,647.004,714.00
52-Week Range
GBX 48.356,394.00
Bid/Ask
GBX 5,642.00 / GBX 4,562.00
Market Cap
GBX 656.71 Bil
Volume/Avg
234,746 / 508,329

Key Statistics

Price/Earnings (Normalized)
27.85
Price/Sales
3.89
Dividend Yield (Trailing)
2.31%
Dividend Yield (Forward)
2.31%
Total Yield
2.47%

Company Profile

Croda is a British specialty chemicals company with 60% of sales outside Europe. Croda operates through three segments: consumer care, life sciences, and industrial specialties. Consumer care produces specialty and active ingredients for cosmetics and skincare/haircare and also flavors and fragrances. The life sciences business manufactures products for healthcare and agrochemicals. The company sold the majority of its industrial businesses to Cargill in 2022, retaining only a subsegment of the business (housed under the industrial specialties segment) that supports the other two segments and sells their byproducts.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Mid Core
Total Number of Employees
5,852

Competitors

Valuation

Metric
CRDA
DSFIR
EVK
Price/Earnings (Normalized)
27.8566.4943.71
Price/Book Value
2.801.251.05
Price/Sales
3.892.380.62
Price/Cash Flow
21.3624.207.33
Price/Earnings
CRDA
DSFIR
EVK

Financial Strength

Metric
CRDA
DSFIR
EVK
Quick Ratio
1.741.200.79
Current Ratio
2.841.961.46
Interest Coverage
9.55−3.42−0.92
Quick Ratio
CRDA
DSFIR
EVK

Profitability

Metric
CRDA
DSFIR
EVK
Return on Assets (Normalized)
6.57%1.31%1.75%
Return on Equity (Normalized)
9.96%2.01%3.66%
Return on Invested Capital (Normalized)
7.95%1.93%3.24%
Return on Assets
CRDA
DSFIR
EVK
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