Heavier storm than currently priced in makes Stifel cut Lenzing to 'sell'
24/10/2022 14:20
** "The storm might hit harder than what's priced in" warns
Stifel as it downgrades Lenzing LENV.VI to "sell" from "hold"
seeing deteriorating demands as well as no positive catalysts in
the upcoming half a year for the Austrian chemical firm
** The broker flags structural high energy costs as well as
deteriorating demand trends due to the difficult macro
environment, putting pressure on Lenzing's earnings
** "As a result, the inflection in profitability might be
further away than the market expects" it adds
** Stifel forecasts the Austrian-based firm to report full
year 2023 EBITDA at EUR 323 mln ($317.64 million), 12.5% below
the firm's own compiled consensus
** It further highlights Lenzing's destocking of viscose
staple fiber, which may last one or two quarters longer, thus
hurting the company's fiber division earnings
** Stifel sees the Lenzing's Brazilian dissolving wood pulp
JV, should support EBITDA development in 2023 and beyond
** The brokerage further underlines the company's streched
balance sheet to be put under pressure, should earnings remain
depressed
** Lenzing withdrew its full year guidance in September,
citing limited market visibility and high volatility of the
energy and raw material markets, thus experiencing its worst day
ever on the stock market
** Stifel cuts the price target for Lenzing by a third to
EUR 39
** Lenzing AG's share price is down 63% year-to-date
($1 = 1.0169 euros)
(Reporting by Tristan Chabba)
((Tristan.chabba@thomsonreuters.com))