Solvay: Credit Suisse double-downgrades stock
(CercleFinance.com) - On Tuesday Credit Suisse downgraded its opinion on Solvay's stock from "outperform" to "underperform" directly, reducing its corresponding target price from 119 euros to 87 euros (current price about 94 euros, -2.
In a report, the broker notes that the chemical group's share price has outperformed the rest of its sector by about 25% YTD, a difference that it attributes to a business portfolio deemed to be "more resistant".
However, the broker predicts that volumes will fall by around 3% in 2023, compared with the current consensus forecast of around 1% growth next year.
In addition to weakening markets, Solvay also faces a less flexible fixed cost structure than its main competitors, a factor that suggests that there could be a greater decline in profits.
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