Caesars Entertainment misses Q2 earnings expectations, shares edge lower
On Tuesday, Deutsche Bank (ETR:DBKGn)’s Dominic Edridge revised the price target for Brenntag AG (ETR:BNRGn) (BNR:GR) (OTC: BNTGY), a global chemical distribution company, lowering it from EUR 86.30 to EUR 80.00. Despite the reduction, the firm maintained a Buy rating on the company’s shares. According to InvestingPro analysis, Brenntag appears undervalued at its current price of $13.45, with a P/E ratio of 16.16 and strong dividend history spanning 14 consecutive years of increases.
The adjustment in the price target comes after Brenntag released its first-quarter results. Edridge updated his model to reflect the latest financial data, which led to a decrease in the 2025 EBITA (earnings before interest, taxes, and amortization) forecast by 8%, setting it at €1,090 million. This figure falls 6.7% below the Vara consensus prior to the results, which was €1,167 million. The company’s current EBITDA stands at $1.23 billion, with a healthy gross profit margin of 24.91%.
Brenntag’s Q1 performance did not meet expectations, prompting Deutsche Bank to reassess its outlook on the company. Although Brenntag has retained its guidance of €1.1 billion to €1.3 billion for EBITA, Edridge noted that the company is now hinting at achieving the lower end of this spectrum. This cautious stance is attributed to the softer Q1 results, heightened macroeconomic risks, and currency exchange headwinds. InvestingPro data shows the company maintains strong financial health with a current ratio of 1.49 and liquid assets exceeding short-term obligations.
The company’s decision to maintain its guidance despite these challenges was detailed in Deutsche Bank’s report issued on May 14, titled "Miss; guidance retained but FX/sequential softening poses risks." This document provides an in-depth analysis of Brenntag’s quarterly outcomes and the potential risks going forward.
Edridge’s comments and the revised price target reflect a careful consideration of the factors affecting Brenntag’s financial health. The report underscores the impact of foreign exchange fluctuations and the broader economic environment on the company’s performance. Brenntag’s stock will continue to be monitored by investors as the company navigates through these risks while striving to meet its financial targets.
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