STOCKS NEWS EUROPE-Rhodia sags on Credit Suisse downgrade

Shares in French specialty chemical products maker Rhodia (RHA.PA) drop 4.4 percent to 4.49 euros -- the biggest losers on France's broad SBF120 index .SBF120 -- after Credit Suisse cuts its rating on the stock to "neutral" from "outperform" and slashes its share price target to 4.50 euros from 7 euros.

"For investors who believe recovery is just around the corner and that upgrades and reratings are likely this stock should shine. However we believe 2009 could be a bumpy ride," Credit Suisse analysts write in a note.

"Historically raw material and currency effects have hit Rhodia's earnings hard and both of those factors should worsen in the second half. In addition we see maintaining a positive cashflow as challenging when working capital improves."

Traders say the stock is also dragged lower by gloomy comments made by rival Clariant's (CLN.VX) CEO. Hariolf Kottmann told Swiss newspaper Finanz und Wirtschaft that the Swiss speciality chemicals company expects demand to be between 16 and 20 percent lower in 2009 than last year.

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