Solvay: Credit Suisse still a seller

(CercleFinance.com) - Credit Suisse confirms its Underperform rating on, and 87 euros target price for, Solvay shares.


Many investors agree that Solvay is cyclical, although short-term bulls point out that demand risk is lower than for equivalent European conglomerates for Q4/Q1, it notes.

Longer term, bulls point to excessive cost savings, which structurally changes the cash profile and accelerates deleveraging, analysts add.

The group's prices are 25% above pre-pandemic levels and each 1% price cut represents a further 4% drop in EBITDA, the analyst says, for whom Solvay's true pricing power will be tested in FY23, given expectations of lower demand in most end markets.

The share's chemical reaction seems slightly negative this morning, down just over 1%, about twice the fall in the Belgian market.


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