Arkema: Credit Suisse no longer a buyer.

(CercleFinance.com) - Credit Suisse has downgraded its buy (“outperform”) rating on chemical group Arkema to neutral.


It is time to pause for breath, says the broker's research report, which has also trimmed its target price from 105 euros to 102 euros.

What can we consider from the quarterly results published by the group? That "Operationally, the optionality surrounding an improvement in Arkema's cyclical earnings now appears more limited," the Swiss broker's research report says, which cites a less favourable outlook for improvements for acrylic acid in China, as well as Fluorogas.

Capex should also be watched: indeed, this will enable Arkema to reduce its exposure to the most common chemical products and will make its earnings less cyclical. However, capex will also weigh on the generation of free cash flow in the near term. In short, although not adopting a sell rating on the stock, Credit Suisse is now more cautious towards it.


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