Piper Sandler expects chemical companies to struggle to grow through 2026

Olin

07/01/2025 14:28

** Brokerage Piper Sandler says it expects lower EBITDA in
Q4 2024 and 2025 for chemical companies due to structural issues
in the EU and Asia; says U.S. operations may "carry most of the
weight"
    ** Says it will be hard for the companies to generate
significant earnings momentum over the next 12-18 months 
    ** Piper Sandler downgrades Dow Chemical  DOW.N  and
LyondellBasell  LYB.N  to 'neutral' from 'overweight', and cuts
PTs to $53 from $60, and $95 from $112, respectively 
    ** Expects Ecolab  ECL.N  (maintain "overweight", PT cut to
$270 from $305) and Olin  OLN.N  (maintain "overweight", PT cut
to $41 from $51), among others, to be in best position to expand
earnings partially on lesser degree of overcapacity in their
markets
    ** Brokerage says it does not expect a rebound in China's
chemical demand growth and U.S. pricing and margins will not be
enough to drive company earnings
    ** Says stimulus in China and the EU will have more gradual
impact than anticipated and might not address overcapacity 
    

 (Reporting by Seher Dareen in Bengaluru)
 ((Seher.Dareen@thomsonreuters.com;))