France's Arkema falls to over 2-month low on expected cuts to outlook

Arkema SA

27/03/2025 08:38

** Shares in French chemicals firm Arkema AKE.PA fall almost 5% to their lowest since mid-January, after J.P. Morgan downgraded the stock to "underweight" from "neutral" on a cloudier outlook from the potential impact of tariffs

** Analysts pointed to weaker US economic data and uncertainty surrounding the impact of tariffs, which make the short-term earnings forecasts for the sector less certain

** "Potential large cuts to consensus (in adjusted EBITDA and free cash-flow in 2025) from a sunset business... mean the valuation will likely be low and the shares will underperform in the foreseeable future", the analysts say

** J.P.Morgan adds the prospect of acquisitions which may dilute return on invested capital (ROIC) also make the stock less attractive

** As of Wednesday's close, shares were up 1.4%​ YTD, but if Thursday's losses hold, they will turn negative for the year

 (Reporting by Mateusz Rabiega; Editing by Amanda Cooper)

 ((Mateusz.rabiega@thomsonreuters.com))