Morgan Stanley foresees tough 2025 for European chemicals

Evonik Industries AG

17/09/2025 09:43

** Morgan Stanley expects European chemicals to face tariff uncertainty and weak demand in 2025, that could erase early optimism and extend the downturn into a fourth year

** The broker warns that if economic weakness persists into 2026, sector valuations could face further downside

** It forecasts global supply of secondary or by-product chemicals produced alongside primary one, so-called co-product, to grow at 3.1% CAGR through 2028, driven mainly by China and the Middle East

** This will keep upstream margins under pressure well into 2026, even if delays reduce that number to around 2%, the broker adds

** MS says its preference is skewed towards more downstream names, such as "overweight"-rated Akzo Nobel AKZO.AS, which it keeps as its top pick, and Syensqo SYENS.BR

** It cuts Solvay SOLB.BR to "underweight" from "equal weight" and Wacker Chemie WCHG.DE from "overweight to "underweight", citing shareholder payout risk

COMPANY
RATING
OLD RATING
PT
OLD PT
Arkema AKE.PA
Overweight
n/a
EUR 90
EUR 94
Syens SYENS.BR
Overweight
n/a
EUR 94
EUR 86
Solvay SOLB.BR
Underweight
Equal-weight
EUR 25
EUR 30
Wacker Chemie WCHG.DE
Underweight
Overweight
EUR 59
EUR 99
Elkem ELK.OL
Equal-weight
n/a
NOK 25.60
NOK 22

 (Reporting by Emanuele Berro)

 ((emanuele.berro@thomsonreuters.com))