In a report released today, Chris Counihan from Jefferies downgraded Akzo Nobel NV (0A00 – Research Report) to a Hold, with a price target of €61.00.
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Chris Counihan has given his Hold rating due to a combination of factors impacting Akzo Nobel NV. The recent financial results showed disappointing EBIT improvements and free cash flow generation, which diminishes the prospects for additional shareholder returns. Coupled with the company’s interest in possibly consolidating Coatings assets, this creates uncertainty around the investment case.
Despite Akzo Nobel’s equity showing a significant valuation discount compared to global peers and the EU chemicals sector, there is no clear indication of operational improvements or a narrowing of the valuation gap by FY25. Additionally, strategic questions arise regarding the synergy of combining Decorative Paints and Performance Coatings under one entity, suggesting potential future portfolio changes. Financially, minimal reduction in net debt is expected due to ongoing restructuring costs and high working capital levels, limiting the potential for substantial share buybacks.
According to TipRanks, Counihan is an analyst with an average return of -3.9% and a 49.09% success rate. Counihan covers the Basic Materials sector, focusing on stocks such as LANXESS, Wacker Chemie AG, and Clariant AG.