Barclays upgrades IMCD, Brenntag as it looks for growth in chemicals market
17/01/2025 08:54
** Barclays says the current high-yield environment is a
good time to invest in growth stocks in the European chemicals
sector, especially those with a high reinvestment rate
** It upgrades IMCD IMCD.AS to "overweight" from
"equal-weight", saying the Dutch speciality chemicals maker has
"sector-leading organic growth, with abundant opportunities to
recycle cash flow into acquisitions"
** Consequently, IMCD has seen by far the best 10-year
returns in enterprise value and equity, it adds
** Barclays acknowledges areas of concern for IMCD in
potential further price deflation and lack of clarity on future
growth trends, but argues its growth has been underestimated by
sell-side analysts for years
** It reiterates Belgium's Azelis AZE.BR at "overweight",
expecting similar gross profit organic growth of 5% for both
speciality chemicals names in 2025-2026
** The broker says the chemical distributor sector looks
poised to outperform as it recovers from weak growth, and
upgrades Germany's Brenntag BNRGn.DE to "equal-weight" from
"underweight"
** Shares of IMCD rise 3% to the top of Amsterdam's AEX
index .AEX
(Reporting by Bernadette Hogg)
((bernadette.hogg@thomsonreuters.com))