On Monday, Deutsche Bank adjusted its financial outlook for Syensqo SA (SYENS:BB), a company listed on the Euronext Brussels stock exchange. The firm's analyst reduced the price target from EUR 100.00 to EUR 90.00 but maintained a Buy rating on the stock.
The decision comes in anticipation of a downturn in the company's third-quarter performance, paired with a cautious stance on the overall economic environment.
Syensqo's adjusted EBITDA for the third quarter is projected to fall by 14% year-over-year to EUR 360 million, a 5.0% decrease from the second quarter's EUR 378 million. The expected decline is attributed to weaker results in the Materials and Corporate & Business Services sectors, which overshadow modest gains in the Consumer & Resources segment.
The analyst's estimates are at the lower end of the company's guidance, reflecting concerns over the impact of a challenging macroeconomic climate, particularly in the automotive sector, which is affecting volumes and pricing margins.
The firm also revised its full-year 2024 EBITDA forecast downward by 2% to EUR 1,405 million, aligning with the lower end of the company's fiscal year guidance and falling below the consensus of EUR 1,426 million.
Furthermore, the 2025 EBITDA forecast has been decreased by 3% to EUR 1,440 million. This figure is 7% below the more optimistic consensus of EUR 1,542 million, mainly due to anticipated lower pricing and margins.
Deutsche Bank suggests that the consensus forecasts for 2024 and 2025 are likely to trend downward as the next earnings report approaches. Despite the reduced projections, the analyst sees potential value in Syensqo's stock, citing the quality of the company's portfolio and current valuation, which stands at 7.5 times the estimated 2025 EV/EBITDA. The bank's analyst believes that short-term market volatility could offer an attractive opportunity for investors to consider Syensqo's shares.
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