Interactive Brokers shares jump as it secures spot in S&P 500
On Wednesday, Morgan Stanley (NYSE:MS) shifted its stance on Evonik Industries AG (ETR:EVKn) (EVK:GR) (OTC: EVKIF), moving the chemical company's stock rating from 'Equalweight' to 'Underweight'. The firm also adjusted the price target to €18.60, a decrease from the previous target of €22.00.
The downgrade was influenced by the expectation that Evonik's profit recovery may lag behind its peers despite the company's resilient performance throughout 2024. Morgan Stanley acknowledged the company's robust portfolio, recovery in specific sectors such as methionine and coatings, and strong cash flow generation.
However, the firm pointed out that the share price decline following the third-quarter results of 2024 was seen as excessively severe, and the current valuation is not considered demanding.
Morgan Stanley's analysis suggests that while Evonik has maintained a strong performance, the anticipated macroeconomic improvements in China and Europe might not benefit the company as much as others in the industry.
The factors that previously contributed to Evonik's outperforming shares, including limited exposure to China and a focus on high-value products in Europe, are expected to be overshadowed as investors shift their focus towards companies with higher beta exposure to economic recovery and the effects of stimulus in China.
The firm's revised view reflects a cautious outlook on Evonik's potential for profit growth relative to its competitors, despite the company's solid operational foundation. This adjustment in rating and price target is aimed at aligning expectations with the evolving market dynamics and investment trends observed by Morgan Stanley.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.