Croda International Plc (LON:CRDA) was downgraded to ‘equal weight’ by Barclays as expectations for 2020 are “too high”.

The price target was also trimmed to 5,000p from 5,300p as the bank said a recovery is not imminent following a sharp half-year decline in personal care.

READ: Croda shares turn ugly as US-China trade dispute hits beauty business

The life sciences division is not large enough to offset the personal care division losses, so the Barclays analysts’ theory goes, which took the market by surprise considering glowing results from other peers in the beauty industry.

The analysts expect this weakness to continue in the second half and then pick up next year, however the FTSE 100-listed group faces competition from multinationals in China as they gain share from the smaller, regional clients Croda is usually measured against.

But the Croda model has always been more about margin rather than revenue growth and, given the recent improvements, it seems to remain “intact”.

Acquisitions are seen as a key upside, although the last sizeable deal was signed in 2015.

“While this highlights management’s financial discipline, this is arguably not enough to transform Croda into a roll-up story, which could imply material upside to the shares,” analysts said in a note.

Shares were slightly down at 4,876p on Monday afternoon.