Arkema: Deutsche Bank reduces target price
(CercleFinance.com) - On Friday Deutsche Bank reduced its target price for Arkema shares from 135 euros to 120 euros following the downward revision of its economic growth forecasts for 2023.
The German bank's analysts - who recently spoke to the chemicals group's chief executive - said that Thierry Le Hénaff told them that business had not changed much since the company's Q2 report and that the company was still on track to meet its annual targets.
However, DB points out that energy-related expenses now represent almost 7% of its total variable costs, compared to just 5% in 2021.
As such, the analyst expects Arkema's results to decline next year, while pointing out that from 2024 onwards the company should be a pure speciality chemical company, with 70% to 75% of its revenues coming from three promising sectors: adhesives, technical polymers and coatings.
With this in mind, Deutsche Bank believes that the stock offers attractive upside potential, based on an EV/EBITDA ratio of 4.6x - it has therefore maintained its Buy rating on it.
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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.
The German bank's analysts - who recently spoke to the chemicals group's chief executive - said that Thierry Le Hénaff told them that business had not changed much since the company's Q2 report and that the company was still on track to meet its annual targets.
However, DB points out that energy-related expenses now represent almost 7% of its total variable costs, compared to just 5% in 2021.
As such, the analyst expects Arkema's results to decline next year, while pointing out that from 2024 onwards the company should be a pure speciality chemical company, with 70% to 75% of its revenues coming from three promising sectors: adhesives, technical polymers and coatings.
With this in mind, Deutsche Bank believes that the stock offers attractive upside potential, based on an EV/EBITDA ratio of 4.6x - it has therefore maintained its Buy rating on it.
Copyright (c) 2022 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.