On Friday, Deutsche Bank adjusted its financial outlook on Clariant AG (SIX:CLN:SW) (OTC: CLZNY) shares, increasing the price target to CHF15.00 from the previous CHF13.50. The firm maintained a Hold rating on the stock.
The update follows the anticipation of the company's second-quarter financial performance, projecting a 31.5% year-over-year increase in adjusted EBITDA to CHF 178 million, surpassing the consensus estimate of approximately CHF 167 million as of May 23, 2024.
The expected rise in adjusted EBITDA is attributed to robust growth in the Care Chemicals and Adsorbents & Additives segments, which is believed to counterbalance a weaker performance in the Catalysts division.
This division faces a challenging comparison due to exceptionally strong results in the previous year. Deutsche Bank's analysis comes after Clariant's management hinted at a possible decline in the second quarter relative to the first, citing seasonal trends as a contributing factor.
The bank's forecast for Clariant's full-year performance suggests that the company might revise its current guidance upwards. Clariant's existing forecast includes low single-digit sales growth in local currency, ranging between 1-3%, and targets a reported EBITDA margin of 15% and an adjusted EBITDA margin of 16%. The projected figures translate to an EBITDA range of CHF 707 million to CHF 721 million before considering the impact of foreign exchange fluctuations on the top line.
Deutsche Bank's revised price target reflects a nuanced view of Clariant's financial trajectory, considering both the seasonal influences on the second-quarter results and the potential for a full-year guidance upgrade. The bank's analysis emphasizes the specific segments within Clariat's business that are contributing to the overall financial picture.
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