In a report released today, Thomas Wrigglesworth from Morgan Stanley maintained a Hold rating on Solvay SA (0NZR – Research Report), with a price target of €32.00.
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Thomas Wrigglesworth’s rating is based on several strategic and operational factors affecting Solvay SA. The company is committed to reducing carbon emissions and achieving carbon neutrality between 2030 and 2050. However, challenges remain in sourcing long-term reliable and competitive green electricity, which is crucial for their E-Solvay process currently being piloted in France.
Additionally, Solvay’s management is considering portfolio adjustments, particularly with the Coatis business, which is not fully aligned with their core strategy but remains cash generative. The company also faces a balance between greenfield and brownfield expansions, with a preference for the latter due to cost efficiency. Despite limited growth capital expenditure, Solvay is focusing on selective projects, such as their electronic grade H2O2 project in China and Taiwan. These factors collectively contribute to the Hold rating, reflecting both opportunities and challenges in Solvay’s strategic direction.