Croda International PLC shares climbed almost 5% to 3,150p on Tuesday morning after the FTSE 100 chemicals group beat expectations in the second half after delivering stronger than forecast fourth-quarter sales.
Adjusted second-half earnings on an EBIT basis came in at £148 million, 2% ahead of consensus, while fourth-quarter constant currency sales growth of 5.0% was well above expectations of around 3-4%.
The Life Sciences arm led the upside, with EBIT 8% ahead of consensus and sales up 7.9% in the quarter.
Full-year 2026 guidance was broadly in line with forecasts, but investors appeared encouraged by the strength of the exit rate and new medium-term targets.
Croda is now aiming for 3-6% annual organic sales growth through to 2028, operating margins above 20% and free cash flow to sales above 12%.
Stronger cash generation and net debt at just 1.3 times EBITDA also supported sentiment.
Analyst Derren Nathan at Hargreaves Lansdown said the speciality chemical company’s results "contained few bangs or flashes but painted a resilient picture as management continues to execute its transformation plan".
He added that while tariff uncertainty made for a tough trading environment, it benefited from broad-based sales growth and efficiency gains.
"With a similar trading performance expected this year, there could be more to come, particularly if the market gains confidence in the company’s plans to expand underlying operating margins to over 20% over the next three years."