Berenberg cuts Brenntag to 'hold' on exchange rate and geopolitical headwinds

Brenntag SE

03/07/2025 09:46

** Berenberg downgrades German chemicals distributor Brenntag BNRGn.DE to "hold" from "buy" on gloomy exchange rate and geopolitical prospects

** The broker says the uncertainties associated with the Middle East conflict are affecting chemicals ordering patterns

** It projects the weakness of the U.S. dollar to lead to EUR 22 mln ($26 mln) fall in EBITA this year, as Brenntag provides inputs to U.S. manufacturers

** As a result, it expects Brenntag to lower its FY25 guidance, with likely profit warnings of chemical manufacturers also affecting short-term prospects

** Berenberg also takes a cautious view on the medium and long term, saying the company needs to heavily invest in its specialties business, and as AI could replace part of its business model

** But the broker says downside risks are priced into the stock, with enterprise multiples trading 25% below the 10-year median

** Out of 21 analysts that cover Brenntag, nine rate it "strong buy" or "buy", nine "hold" and three "strong sell" or "sell" - LSEG data

($1 = 0.8474 euros)

 (Reporting by Simon Ferdinand Eibach)

 ((Simonferdinand.eibach@thomsonreuters.com))