Jefferies sees H2 demand destruction hitting EU chemicals
20/05/2026 07:44
** Jefferies sees signs the current cyclical upswing in European chemicals may reverse and flags risks of demand destruction in the second half of 2026 ** The broker says the sector has been driven by supply disruption, customer pre-buying and redirection of Chinese volume sales rather than structural reforms, and sees further risks as supply chains stabilise and inflation hits ** "Equity markets have quickly capitalised this pricing uplift, with share price reactions increasingly disconnected from underlying earnings revisions," Jefferies writes ** It upgrades Evonik EVKn.DE to "buy" from "hold", citing a more defensive demand, relative pricing agility and earnings resilience compared to peers ** Jefferies raises Brenntag BNRGn.DE to "hold" from "underperform", as it deems the chemicals distributor to benefit from lower demand elasticity than peers and higher prices near-term boost the company's earnings ** It cuts Lanxess LXSG.DE to "underperform" from "hold", as it notes the stock's 53% price rally since March fast outpacing the 9% earnings upgrades and peer moves, while the company risks demand destruction into the second half of the year ** Evonik up 2.6% on Tradegate, Brenntag up 1.8%, Lanxess down 3.4%
| COMPANY | RATING | OLD RATING | PT | OLD PT |
|---|---|---|---|---|
| Akzo Nobel | HOLD | - | EUR 50 | EUR 59 |
| Arkema | HOLD | - | EUR 54 | - |
| BASF | HOLD | - | EUR 49 | EUR 43 |
| Brenntag | HOLD | UNDERPERFORM | EUR 56 | EUR 42 |
| Clariant | UNDERPERFORM | - | CHF 6 | CHF 5.70 |
| Evonik | BUY | HOLD | EUR 20 | EUR 15.10 |
| Lanxess | UNDERPERFORM | HOLD | EUR 16 | EUR 17 |
| Solvay | UNDERPERFORM | - | EUR 18 | EUR 20 |
| Syensqo | BUY | EUR 73 | EUR 82 | |
| Wacker Chemie | HOLD | EUR 96 | EUR 74 |