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Investing.com - JPMorgan has downgraded Sika AG (SIX:SIKA) from Neutral to Underweight and reduced its price target to CHF160.00 from CHF183.00, implying approximately 5% downside potential.
The rating change follows Sika’s recent quarterly results, which JPMorgan described as a negative surprise with a third-quarter miss and a downward revision of full-year 2025 guidance. The company also lowered its medium-term growth expectations to 3-6% in local currency, down from previous projections of 6-9%.
JPMorgan noted that Sika’s new growth targets are broadly in line with close peer Saint-Gobain’s 2030 targets of mid-single-digit growth in local currencies. The bank also pointed out that Sika’s margin performance is only slightly ahead of Saint-Gobain on a reported basis.
Despite similar operational metrics, Sika trades at 13.2x EV/EBITDA on JPMorgan’s revised 2026 EBITDA estimates, compared to Saint-Gobain at 7.2x. This represents a 55% premium over the average valuation of its peer group, which includes Kingspan, Saint-Gobain, and Rockwool.
JPMorgan considers this premium unsustainable given what it describes as a "lack of operational outperformance and in fact continued earnings disappointment," suggesting further negative momentum could be driven by additional de-rating and earnings risk.
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