Croda: Enviable Life Sciences Portfolio Should Support Accelerated Growth Over Next Decade

We are raising our fair value estimate for Croda by around 10% to GBX 5,900 per share following a transfer of coverage and a fresh look at our long-term thesis. We are now more positive about the company's long-term top-line growth trajectory, primarily driven by the life sciences segment. Here we expect the sizable customer and innovation pipeline for Croda’s differentiated drug delivery portfolio to translate into high-single-digit revenue growth for the segment through 2027 and beyond. We view the shares as relatively fairly valued at current levels, although limited upside still remains in our valuation.