Citi seeks European chemicals resilience amid tariff chaos; upgrades Symrise

Symrise AG

14/04/2025 09:19

** Citi says U.S. tariffs mean major uncertainties for European chemical companies, but notes a worst-case scenario may have been avoided

** It sees no volume growth for diversified chemical firms in 2025 and says Q2 is difficult to assess amid diverging trends of U.S. pre-buying and weaker China and auto industry

** "Our analysis indicates a potential ~20% cut to consensus EBITDA for the group in a GFC/pandemic-like Bear Case scenario," it says about the companies it covers

** Citi models biggest downsides for Wacker Chemie WCHG.DE ("buy"), Lanxess LXSG.DE ("neutral") and BASF BASFn.DE ("neutral"); Evonik EVKn.DE and Arkema AKE.PA remain sector favourites (both "buy")

** "When the dust settles, though, the case for Europe could look relatively attractive again," it adds

** Citi says flavour and fragrance makers offer a more defensive option with resilient business models and local-for-local production

** But they also face risks from higher raw material costs, pressured growth in emerging markets and inflation, it says

** It upgrades Symrise SY1G.DE to "buy" from "neutral" on its attractive valuation, access to raw materials and robust end market exposure

 (Reporting by Maria Rugamer)

 ((Maria.Rugamer@thomsonreuters.com))