Lanxess falls after Barclays cuts to 'equal weight'

Standard Lithium

17/08/2023 07:58

** Lanxess shares are down 1.8% in early Frankfurt trade
after Barclays downgrades to "equal weight", taking a more
cautious approach on the German chemicals group's 2024 earnings
recovery 
    ** Barclays says lower bromine prices and rising costs in
the company's venture with Standard Lithium will hit Lanxess
hard  in 2024, while cash conversion is set to continue to lag
    ** The broker forecasts 25% EBITDA growth in 2024, 8% below
Bloomberg consensus 
    ** Good news could very well come from Lanxess' efforts to
extract lithium more quickly in concert with Standard Lithium,
says Barclays, but the project's costs are now about three times
above initial estimates and production could not begin until the
end of 2025 at the earliest
    ** Cash conversion also continues to lag peers, says the
broker, with Lanxess' conversion just above 20% of mid-cycle
EBITDA versus almost 40% for competitor Evonik
    ** " Evonik  has a stronger cash generation and recovery
track record," says Barclays



 (Reporting by Louis van Boxel-Woolg)
 ((Louis.vanBoxel-Woolf@thomsonreuters.com))