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Investing.com - JPMorgan downgraded Wacker Chemie AG (ETR:WCH) stock rating from Neutral to Underweight and lowered its price target to EUR50.00 from EUR60.00 on Friday.
The downgrade comes as JPMorgan identified substantial excess inventory of semiconductor wafers in the supply chain, which could lead to significant destocking in Wacker’s semiconductor-grade polysilicon business over the coming year.
Despite double-digit volume growth in 2025 and accounting for approximately 22% of the group’s expected 2025 EBITDA, Wacker’s semiconductor business now faces headwinds that could further pressure earnings estimates.
JPMorgan reduced its FY26/27E adjusted EBITDA forecasts by 4%/10% to €578 million (-1% year-over-year) and €647 million (+12% year-over-year), respectively, with these new estimates falling 12%/14% below Bloomberg consensus.
The investment bank noted Wacker’s return on tangible equity is projected at -1%/+1%/+3% in FY26/27/28E, well below the 8%+ cost of equity, with minimal or no dividend payments expected until FY27E.
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