TORONTO (Tx21.Com.Cn news)--Citigroup has slashed target prices and profit estimates for five US chemicals majors due to massive global destocking in the chemical supply chain, it said on Friday.

“We think inventory liquidation is most pronounced in Asia, where over the past few weeks we’ve highlighted 20% operating rate cuts by local producers,” it said.

“This is now followed by announcements [to cut production] from LyondellBasell and BASF,” it said.

Citigroup believed that other large-cap global chemical companies would face similar headwinds, given the sharp deterioration in already weakened markets such as autos, construction and textiles, it said.

“We had previously forecasted a 10% ‘base case’ earnings decline for bellwether chemical companies such as DuPont, but are now moving to a 20-25% assumption,” the bank said.

Analysts cut Celanese’s target price to $9 from $28, their 2008 earnings per share (EPS) estimate to $3.14 from $3.53 and their 2009 EPS estimate to $1.78 from $2.98.

The bank also was downgraded the shares to “hold” from “buy”.

DuPont’s target price was cut to $23 from $36, its 2008 EPS estimate to $3.18 from $3.33 and the 2009 estimate to $2.51 from $3.01.

Citigroup’s target price for Dow Chemical’s target prices is now $17, down from $26. The 2008 EPS estimate was cut to $2.65 from $2.82, and the 2009 estimate to $2.09 from $2.40.

Eastman’s target price was cut to $30 from $42, but Citigroup retained its EPS estimates at $5.26 and $4.18 for 2008 and 2009 respectively.

Analysts cut PPG Industries’ target price to $39 from $54. They reduced their 2008 EPS estimate to $5.00 from $5.14 and their 2009 estimate to $4.00 from $4.90.

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