Arkema: Credit Suisse upgrades to buy
(CercleFinance.com) - Credit Suisse has upgraded its rating on the share of the French chemical group Arkema: previously neutral on the stock, analysts have now adopted a buy rating ("outperform").
Having increased its target price for the share from 101 euros to 103 euros, this suggests upside potential of 25%.
Despite macroeconomic uncertainty, Credit Suisse highlights the group's "resilience," i.e. the ability of Arkema's Adhesives division to increase its margins, particularly thanks to stable prices, while raw material costs are falling.
In addition, the group's acrylic activities in Asia should offset the more disappointing performance of the PMMA (polymethyl methacrylate) division. In short, Arkema is expected to outperform the chemical sector in terms of earnings in 2019.
Finally, applying the EV/EBITDA ratio, Credit Suisse calculates that the Arkema stock is currently trading at a 25% discount relative to its sector, against an historical average of 17%.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Having increased its target price for the share from 101 euros to 103 euros, this suggests upside potential of 25%.
Despite macroeconomic uncertainty, Credit Suisse highlights the group's "resilience," i.e. the ability of Arkema's Adhesives division to increase its margins, particularly thanks to stable prices, while raw material costs are falling.
In addition, the group's acrylic activities in Asia should offset the more disappointing performance of the PMMA (polymethyl methacrylate) division. In short, Arkema is expected to outperform the chemical sector in terms of earnings in 2019.
Finally, applying the EV/EBITDA ratio, Credit Suisse calculates that the Arkema stock is currently trading at a 25% discount relative to its sector, against an historical average of 17%.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.