'The only way is up' - Berenberg initiates IMCD and Azelis with 'buy', Brenntag with 'hold'

Azelis NV

13/03/2024 14:43

** Berenberg says chemicals distributors in Europe should
see their organic gross profit swinging to positive in 2024
after the average decline of 4% accompanied by 20% volume slump
they experienced in 2023
    ** "We think that after a year of pain, volumes sit at low
levels and so for all distributors the only way is up", says the
broker
    ** "Speciality is our favoured exposure," says Berenberg
adding that speciality providers can outgrow the market through
value-add services such as formulation
    ** Berenberg initiates coverage of Netherlands's speciality
chemicals maker IMCD  IMCD.AS  with a "buy" rating and PT of EUR
183, citing the group's cash conversion, 11% ROIC (vs Azelis'
6%) as well as exposure to India, and global chemical growth
region, that will allow for gross profit expansion ahead of
peers
    ** Berenberg also initiates Belgium's formulation work
specialist Azelis  AZE.BR  with "buy" and PT of EUR 24, saying
the company is "fundamental match to IMCD" but is "undoubtedly
undervalued" at the current share price and trades at a 50%
discount to IMCD 
    ** Finally, Berenberg starts rating on Germany's Brenntag
 BNRGn.DE  with "hold" at PT of EUR 86, saying it remains
"cautious" given the company's legal split of the business and
2027 "aggressive" targets that could potentially bring "material
upside" to the share price

 
    
    

 (Reporting by Alban Kacher)
 ((Alban.kacher@thomsonreuters.com))