Clariant: Barclays downgrades stock

(CercleFinance.com) - On Wednesday Barclays downgraded its rating on the Swiss chemical group Clariant from "overweight" to "equal weight," while reducing its target price from 20 Swiss francs to 17 Swiss francs.


Analysts argue that their positive stance, which they adopted last year, was based on the stock's discount, which in their opinion meant that the plastics and coatings business was theoretically offered "free of charge".

"Now investors are paying a premium, which we think would only be justified in an acquisition scenario," the broker warns.

This is a scenario that could happen, Barclays acknowledges, but it could also fail to materialise and could give rise to a number of downside risks.

"Our sense is that SABIC would rather play the long game as Clariant's partner than trigger an obligatory bid for all its outstanding shares," analysts add.


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