Covestro: Barclays still says 'overweight', but cuts TP
(CercleFinance.com) - Barclays maintains its "overweight" recommendation on the Covestro share, although has removed its best-pick status, while reducing its corresponding target price from 56 euros to 53 euros, now seeing less potential for earnings revisions for the German chemicals group.
"Costs are expected to be a much greater headwind on earnings in 2021 than we expected," the broker says. "This more than offsets higher price expectations and leads us to lower our EBITDA expectation for 2021 by 6%".
However, Barclays expects "the momentum to remain positive" and, on 6x 2021E EBITDA, Barclays continues to see Covestro as " arguably the most interesting value stock in European chemicals".
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
"Costs are expected to be a much greater headwind on earnings in 2021 than we expected," the broker says. "This more than offsets higher price expectations and leads us to lower our EBITDA expectation for 2021 by 6%".
However, Barclays expects "the momentum to remain positive" and, on 6x 2021E EBITDA, Barclays continues to see Covestro as " arguably the most interesting value stock in European chemicals".
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.