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Jefferies downgraded Arkema SA (OTC:ARKAY) (OTC:ARKAF) stock rating to Hold from Buy on Monday, citing concerns about the chemical company’s ability to achieve earnings targets from its growth investments.
The research firm also cut its price target on the French specialty chemicals manufacturer to €65.00 from €80.00 as part of a broader sector outlook adjustment. Jefferies reduced its average EBITDA forecast for Arkema (EPA:AKE) by approximately 5%, positioning its estimates about 5% below consensus.
Jefferies analyst Chris Counihan noted in his report that Arkema’s growth investments appear to be creating challenges rather than opportunities. "Rather than provide an opportunity to grow earnings ahead of the sector, it demonstrates Arkema is even more dependent on the cycle," Counihan wrote.
The downgrade reflects a shift in Jefferies’ preference within the chemicals sector toward Syensqo, which received a Buy rating. The firm forecasts higher earnings growth for Syensqo, citing greater portfolio change as a key factor.
Arkema, which trades on Euronext (EPA:ENX) Paris under the ticker AKE:FP and in the United States as an over-the-counter stock, specializes in specialty materials including adhesives, technical polymers, and coating solutions.
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