Baader's European chemicals picks for H2 as sector faces gradual recovery
25/06/2024 09:36
** Baader Helvea sees a gradual recovery ahead for the
European chemicals sector, and says it favours speciality and
special situations chemical companies over diversified ones
** Diversified and higher volume chemical stocks underwent a
price correction during Q2, while more specialised chemicals
held up well, it says
** It prefers "buy"-rated Clariant CLN.S and KWS Saat
KWSG.DE over the medium term, saying their structural
portfolio organisation should lead to higher margins and
stronger FCF generation
** It upgrades Wacker Chemie WCHG.DE to "buy" from
"reduce", citing tailwinds from the Polysilicon and Biosolutions
businesses that should boost its earnings in 2025
** It expects Germany's BASF BASFn.DE ("add") to beat Q2
consensus estimates by around 1% and report a Q/Q improvement in
cracker margins
** But it's cautious on BASF's mid-term earnings potential,
saying global cracker overcapacities will affect its upstream
capacity utilisation at least until 2026/27
BAADER'S RATING AND PT CHANGES:
COMPANY RATING OLD RATING PT OLD PT
BASF Add n/a EUR 50 EUR 53
Fuchs FPEn.DE Add n/a EUR 48 EUR 42
Givaudan GIVN.S Reduce n/a CHF 4,050 CHF 3,950
Wacker Chemie Buy Reduce EUR 122 EUR 109
(Reporting by Tristan Veyet)
((Tristan.chabba@thomsonreuters.com))