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Symrise: Société Générale upgrades to buy.

(CercleFinance.com) - Société Générale (SG) has upgraded its “hold” rating on Symrise, the German aroma and fragrance specialist, to “buy.

SG says that the latest investments should boost growth, with SG therefore raising its 12-month target price from 62 euros to 85 euros (+37.1%).

"Symrise's recent increase in growth capex should results in accelerated volume growth, improving earnings, and FCF momentum from 2019," its report says.

Indeed, Symrise is not a direct beneficiary of the citral shortage, an aromatic ingredient, at BASF. Symrise has used another chemical formulation for menthol and its production, which is therefore not affected by BASF's problems, and is already pre-sold by contracts lasting three to five years, SG explains.

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