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On Thursday, Deutsche Bank (ETR:DBKGn) adjusted its price target on shares of Arkema SA (OTC:ARKAY) (AKE:FP) (OTC:ARKAF), a global manufacturer and distributor of specialty chemicals and advanced materials. The new price target is set at EUR 85.00, a decrease from the previous EUR 88.00, while the firm maintains a Buy rating on the stock.
The revision follows Arkema (EPA:AKE)’s first-quarter financial results, which prompted Deutsche Bank to update its model. The bank’s analyst, Virginie Boucher-Ferte, noted that while the company’s Q1 EBITDA was in line with expectations, the outlook for the year has been lowered. This adjustment is primarily due to a 3% reduction in the 2025 underlying EBITDA forecast, now set at €1,450 million. This figure falls 5% below the pre-results company-compiled consensus and 4% below the company’s own guidance.
The lowered EBITDA forecast is attributed to a combination of factors, including decreased volumes, adverse foreign exchange (FX) movements, and more negative pricing in Arkema’s non-core Intermediates business segment. These challenges have led to a less favorable financial outlook for the company.
Looking ahead to the second quarter, Deutsche Bank projects that Arkema’s EBITDA will drop by 12% year-over-year. This follows a 6% year-over-year decline in the first quarter. The anticipated further decline is due to increasing FX headwinds and worsening volume trends in the United States.
Arkema’s stock price adjustment reflects the bank’s expectation of near-term challenges for the company. However, the Buy rating suggests that Deutsche Bank still sees a positive long-term outlook for Arkema despite the current headwinds.
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