MOSCOW (MRC) -- Goldman Sachs Group cut earnings estimates at seven US chemical makers to reflect a stronger dollar and product prices that are falling with crude oil, said Hydrocarbonprocessing.
Goldman Sachs lowered 2015 profit estimates by 20% at Dow Chemical and LyondellBasell Industries, 19% at Westlake Chemical and 6% at Eastman Chemical, analysts led by Robert Koort said in a note.
The changes reflect the impact of falling oil prices on ethylene and related plastics. Estimates for 2016 were also reduced.
"Despite this cut, we still see downside risk to our 2015 EPS estimates if we use the current spot Brent oil price or our commodities team’s new $50 per barrel Brent oil forecast for 2015," Koort said in the note.
Goldman has cut profit estimates for Dow Chemical, the largest US chemical maker, seven times since oil peaked in June. The slide in oil prices and a rising dollar against the euro and other currencies will lead other industry analysts to revise estimates, Goldman said.
The analysts also cut 2015 estimates for intermediate chemical makers Celanese, Huntsman and Trinseo, as the benefit of lower ethylene is eventually passed through to consumers via lower prices, Goldman said.
The exceptions are paint makers which should be able to maintain prices and benefit from lower costs.
As MRC wrote before, Turkish petrochemicals company Petkim said on Friday it had agreed to sell a 30% stake in its Petlim port to Goldman Sachs for USD250 million. Talks for the sale had started in February this year. Petkim and Petlim are controlled by the Turkish branch of Azeri energy group Socar.