Broker tips: Croda, Fresnillo
By Iain Gilbert
Date: Friday 17 Oct 2025
(Sharecast News) - Analysts at Berenberg hiked their target price on speciality chemicals company Croda from £31 to £33 on Friday, stating gains in beauty had outweighed plateaus in health.
Berenberg said Croda's multi-year high enterprise value/underlying earnings discount versus its consumer peers left the shares "primed for a relief rally" following its "robust Q3 sales update" on 16 October.
Croda reported third-quarter group organic sales growth of 6.5%, exceeding 4.4% from peer Givaudan, led by marketshare gains in beauty actives, a strong performance in fragrances and flavours, and a recovery in beauty care.
The German bank, which also reiterated its 'buy' stance on the stock, stated that Croda's low starting valuation left the market "more inclined to overlook its imperfections" - namely, the sensitivity regarding one-third of its pharma unit being exposed to RNA/biotech-funding-squeeze news in the US.
"The pharma business did not grow sales in Q3," noted Berenberg. "However, we doubt that consensus group EBIT estimates will change much for 2025/26, primarily because trims to Life Sciences EBIT (including pharma) may be offset by better mix and operating leverage in the Consumer Care division in 2026."
Over at JP Morgan, analysts reiterated their 'overweight' rating on Croda following its strong third-quarter numbers, flagging a number of reasons for its "bullish view".
JPM said: "The earnings downgrade cycle is largely behind us, with consensus estimates likely to remain stable even as much of the sector faces further cuts; improved execution in OSG delivery, operating leverage and self-help cost actions; [and] the market's pessimism on business fundamentals, particularly regarding competitive pressures and portfolio commoditisation, seems excessive to us."
Notwithstanding some possible near-term growth headwinds in the pharma business from the recent US policy changes, JPM said there was "significant mid-to-long-term earnings upside optionality" from the firm's strong pipeline of customer projects across multiple pharma segments.
"Improved earnings delivery close to the sitting consensus should likely drive a step-by-step rerating of the shares," it added.
Analysts at Canaccord Genuity raised their target price on mining firm Fresnillo from 980p to 2,440p on Friday after running its second revised fourth quarter precious metals price deck through its model on the stock to see where its forecasts landed in the years ahead.
Canaccord Genuity increased its 2026-2028 gold price by 14-15%, with its silver price deck up 19-20% in the same timeframe, meaning its 2025 underlying earnings estimate was up 31% to $2.3b, while its 2026 estimate was up 78% at $2.6b.
"With over US$1b in free cash now forecast to be generated in both 2025E and 2026E, on our numbers, we have increased our dividend payments to over US$600m pa, driven by a 100% increase to our DPS forecasts in both years," said the Canadian bank.
"We have also increased our target price by 149% to 2440p (from 980p), but note that this also uses both NAV and EV/EBITDA multiples at a 20% premium to the rest of the sector. With 7% implied downside to our revised target price."
Canaccord Genuity also reiterated its 'hold' rating on the stock.
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