'Too expensive': Berenberg cuts EMS Chemie to 'hold'

Ems Chemie Holding AG

31/10/2022 11:15

** Berenberg cuts Swiss producer and supplier of polymers
and chemicals EMS Chemie  EMSN.S  to "hold" from "buy", saying
the stock remains too expensive despite ytd underperformance
against European chemicals sector
    ** With shares trading on c26x 2023 consensus EPS, which the
broker views as 7% too high, Berenberg deems the investment
proposition no longer attractive
        ** It highlights that its bull case – with the triple
effect of volumes, price growth and mix – has failed to
materialise
  
    ** The broker also points to a disappointing volume
performance in Q3 2022, saying it is "ominous for 2023" 
    ** "We suspect EMS Chemie is entering a destocking phase,
with its automotive and consumer goods clients cutting back on
orders in anticipation of lower demand in 2023" Berenberg says
    ** Berenberg sees destocking cycle in automotive,
competitors' capacity additions and general macroeconomic
weakness putting pressure on polymer prices
    ** EMS Chemie shares now down 4.1% and the stock is on the
bottom of Swiss mid-cap index  .SMIM 
    ($1 = 0.9990 Swiss francs)
 (Reporting by Ozan Ergenay)
 ((ozan.ergenay@thomsonreuters.com))