Barclays advises patience with European Diversified Chemicals

Solvay SA

27/11/2024 12:30

** Barclays says European Diversified Chemicals fit the bill
for investors looking for cheap cyclical exposure in
reflationary market 
    ** It reiterates its positive view on the sector that enters
another year of slow recovery and, similarly to Citigroup,
points to 20% cheap valuation multiples that haven't re-reated
in two years despite cycle progression into the early recovery
and gas prices falling 60% in Europe
     ** Barclays expects the industry to grow another 2-3% in
2025 but says the market is "too optimistic" about volumes or
spreads for BASF  BASFn.DE , Clariant  CLN.S , Covestro
 1COV.DE , Solvay  SOLB.BR  and Syensqo  SYENS.BR  
    ** It reiterates "overweight" ratings for AkzoNobel
 AKZO.AS , Arkema  AKE.PA , and Evonik  EVKn.DE , citing their
robust positioning and minimal earnings risks relative to peers 
     ** It raises Syensqo to "equal weight", from "underweight",
reflecting valuation stabilization despite ongoing concerns
about achieving 2025 FCF targets
    ** Barclays remains "underweight" on Solvay due to elevated
idiosyncratic risks linked to trade flow rebalancing in the soda
ash market
    

 (Reporting by Johan Bodinier)
 ((johangeorgesroger.bodinier@thomsonreuters.com))