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Investing.com - Goldman Sachs downgraded Clariant AG (SIX:CLN) from Buy to Neutral and reduced its price target to CHF9.00 from CHF11.00, citing concerns over ongoing ethylene cartel litigation.
The Swiss specialty chemicals company reported its second-quarter 2025 results on July 31, beating consensus adjusted EBITDA estimates by 3%, driven primarily by its Catalysts division and Corporate line, which offset lower-than-expected performance in Care Chemicals.
Goldman Sachs noted that ethylene cartel litigation claims from various suppliers, amounting to €6.4 billion against four companies including Clariant, reduce the probability of a sum-of-the-parts valuation crystallization for the company. These claims relate to alleged price-fixing and market-sharing practices among ethylene purchasers between 2011 and 2017.
While Goldman Sachs acknowledges Clariant presents a potential "deep value" opportunity at 5.7x EV/EBITDA, representing a 25% discount to its peer group, the investment bank expressed reduced confidence in value realization amid a slowing global growth environment.
Goldman Sachs’s adjusted EBITDA expectations for Clariant now fall below consensus for fiscal years 2026 and 2027 by 6% and 2% respectively.
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