UBS upgrades Germany’s LANXESS to ‘buy’ from ‘neutral’

11 July 2012 10:23  [Source: ICIS news]

LONDON (ICIS)--UBS has upgraded its share rating for Germany-based chemicals group LANXESS from “neutral” to “buy”, after the group’s earnings proved resilient despite a volatile market, the investment bank said on Wednesday.

The investment bank said that over the fourth quarter of 2011 and the first quarter of 2012, LANXESS has demonstrated “EBITDA [earnings before interest, tax, depreciation and amortisation] resilience,” despite volatile automotive and tyre end markets.

“LANXESS’ EBITDA performance has defied sceptics through continued EBITDA growth despite declining volumes and extremely volatile raw material prices,” UBS added.

The investment back also said that by focusing on research and development, LANXESS has significantly strengthened its position versus its customers over the years.

“LANXESS is the largest non-integrated buyer of butadiene globally. Butadiene supply will not meet demand but tyre producer reliance on LANXESS for innovation and its size in the market should ensure its leading market position for some time,” UBS added.

In September 2011, UBS upgraded its share rating for LANXESS to “neutral” from “sell”, based on expectations that demand for high-performance tyres will grow.

The investment bank raised its target share price for LANXESS to €65 from €46 in April this year on higher expected earnings. UBS's current price target for LANXESS stands at €66.

LANXESS shares were trading at €52.91 on Germany’s Xetra stock exchange at 09:10 GMT, up by 0.07% on the last close.

($1 = €0.82)

By: Franco Capaldo
+44 (0)20 8652 3214

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly