Excellence Nessuah analyst Richard Gussow has raised his estimates and price target for Israel Chemicals (TASE: CLIM).
"Israel Chemicals 4Q04 results were well above our expectations and market consensus. Net income was $81.8m compared to our S$66.9m estimate and last year's S$13.8m. 4Q04 sales were US$746.5m, a 32.4% YoY increase, stemming from higher prices. Operating income was US$100.9m compared to US$29.2m a year earlier," Gussow writes..
"Rising prices and strong demand have left producers with no inventory and little excess capacity. With demand for grains rising, particularly from emerging economies such as China, global potash markets should remain very strong through at least FY05.
"The recovery of the technology sector and the delay in full implementation of the Montreal Protocol contributed to this segment’s strong performance in FY04. There is a shortage of bromine worldwide, although the apparent slowdown in the global technology sector could dampen further price increases. Higher energy prices led to increased sales of bromine-based oil exploration products.
"We are raising our FY05E and FY06E estimates to US$0.233 and US$0.251 respectively. We are setting our target price to NIS 14.2, representing a FY05E PER of 14.0x, which we believe is justified when compared to its peers, especially given the company’s strong fundamentals and the positive outlook for its products. We rate the stock a Buy."
Published by Globes [online], Israel business news - www.globes.co.il - on April 4, 2005