Diversified chemicals to benefit as European sentiment nears trough, Stifel says
13/01/2023 11:44
** Stifel sees tough fundamentals for European chemicals in
H1 and says positive earnings news "might be rare", but low
valuations mean limited downside as sentiment nears a trough
** The broker says the Cefic chemical sentiment indicator
could bottom out in Q1, which is likely to support share price
trends
** "In general, diversified chemicals should benefit from a
better stock market environment, while defensives have little
room for positive surprises," it says
** The broker adds stocks could be harmed if managements
stay "overly cautious" with their outlooks
** Stifel downgrades Arkema AKE.PA to "hold" from "buy" on
a risk of continued acrylic margin squeeze in H1 and potentially
cautious guidance
** It upgrades Fuchs Petrolub FPEn.DE to "buy" from "hold"
as it expects the lubricants maker to guide for higher earnings
in 2023 thanks to improved momentum
** Its other Q1 ideas include Solvay SOLB.BR , Wacker
Chemie WCHG.DE , K+S SDFGn.DE and Linde LINI.DE , LIN.N
(all "buy")
** It cuts seeds producer KWS KWSG.DE to "hold" from "buy"
as the stock has almost reached its price target, and Covestro
1COV.DE to "sell" from "hold" after a recent share rally
(Reporting by Alberto Chiumento)
((alberto.chiumento@thomsonreuters.com))