Incannex Healthcare Halted, News Pending
On Friday, Citi analysts adjusted their stance on OCI NV (OCI:NA), downgrading the stock from a ’Buy’ to a ’Neutral’ rating, while also trimming the price target to €8.30 from the previous €8.98. The revision follows a significant shareholder return executed on May 7, which prompted a reevaluation of the company’s valuation.
The analysts recalculated OCI’s sum-of-the-parts valuation, leading to a new fair value estimate of €8.30 per share, which is approximately 9% higher than the current share price. Despite OCI’s anticipated net cash position of €1.6 billion by 2025, which is on par with its current market capitalization, Citi analysts see limited potential for further stock appreciation.
The valuation of OCI’s remaining European Nitrogen business could contribute an additional €2 per share, according to Citi’s estimates. Nevertheless, the U.S. methanol market’s highly consolidated status, as indicated by a Herfindahl index greater than 1,800, suggests that antitrust authorities may impose restrictions. Consequently, the analysts recommend applying a discount to the anticipated Methanol proceeds.
The strategic outlook for OCI also presents uncertainties, which contributes to Citi’s more cautious perspective. In light of the stock’s more than 25% surge in the past month, the risk/reward balance does not appear compelling enough to maintain a ’Buy’ recommendation, leading to the downgrade to ’Neutral’.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.