Fuchs Petrolub: Berenberg ups, sees turning point for FCF in 2020
20/03/2020 07:59
** Berenberg upgrades Fuchs Petrolub FPEG_p.DE to "buy"
from "hold", saying 2020 should mark a turning point for the
industrial lubricant maker's dropping earnings
** Fuchs has next to no debt and should see a free cash flow
turnaround a year earlier after management's decision to end its
capital expenditures cycle in 2021, the broker adds
** The company has one of the sector's best returns on
employed capital, and it is not difficult to imagine Fuchs using
excess cash for buybacks post-2020, the broker says
** While the rise of electric vehicles means less demand for
lubricant oil, the company offers higher-value products that
could offset the weakness in volumes, Berenberg adds
** The market for electric vehicle greases, on which Fuchs
has been successful winning orders, is also less competitive and
less open to pricing pressures than engine oils, Berenberg says
((zuzanna.szymanska@tr.com))