Covestro (1COV) AI Stock Analysis

• Market Cap: €11.17B
• Dividend Yield: N/A
• Average Volume (3M): 24.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.17
• Revenue Growth: -1.98%
• EPS Growth: N/A
• Country: DE
• Employees: 17,578
• Sector: Basic Materials
• Sector Strength: 60
• Industry: Chemicals - Specialty
• EPS (TTM): -0.31
• Shares Outstanding: 189,000,000
• 10 Day Avg. Volume: 23,779
• 30 Day Avg. Volume: 24,660
• PEG Ratio: -1.16
• Price to Book (P/B): 1.59
• Price to Sales (P/S): 0.75
• P/FCF Ratio: 119.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €60.75
• Price Target Upside: 0.25% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 48 Neutral
• Price Target: €60.00 ▼(-0.99% Downside)

Covestro's overall stock score is primarily impacted by its financial performance challenges, including declining revenues and profitability issues. Technical analysis provides a neutral outlook, while valuation concerns due to a negative P/E ratio further weigh on the score.

Covestro Business Overview & Revenue Model

Company Description

Covestro AG is a global leader in the production of high-performance polymer materials and is headquartered in Leverkusen, Germany. The company operates primarily in the sectors of polycarbonate, polyurethane, and coatings, adhesives, and specialties. Covestro's core products include polycarbonate sheets, foam systems, and various specialty chemicals that cater to diverse industries such as automotive, construction, electronics, and healthcare, emphasizing sustainability and innovation in its offerings.

How the Company Makes Money

Covestro generates revenue through the sale of its polymer products and specialty chemicals, which are used in a wide range of applications. Key revenue streams include the production and sale of polycarbonate, which is used in industries like automotive and electronics for its lightweight and durable properties, as well as polyurethane systems for insulation in construction and refrigeration. The company also offers a variety of coatings and adhesives that serve multiple industries. Significant partnerships with major manufacturers and brands enhance its market reach and provide stability to its revenue. Additionally, Covestro focuses on sustainability, investing in circular economy initiatives and innovative solutions that align with global trends, which can lead to new revenue opportunities.

Covestro Financial Statement Overview

Summary

Covestro is experiencing declining revenue and profitability, with negative net profit and free cash flow, indicating financial challenges. While leverage is manageable, the company struggles with returns and cash flow stability.

Income Statement

Covestro's income statement reflects a challenging period with declining revenue and profitability. The TTM shows a negative net profit margin of -2.76%, indicating losses. The gross profit margin has decreased to 14.4% in the TTM from 15.4% in the previous year, pointing to cost pressures. EBIT and EBITDA margins have also weakened, with EBIT margin turning negative. The company faces declining revenue growth, with a TTM revenue drop of 0.2% compared to the previous annual period. These factors highlight significant profitability challenges.

Balance Sheet

The balance sheet reveals moderate financial health. Debt-to-equity ratio is at 0.58 in the TTM, showing manageable leverage. However, the equity ratio has slightly decreased to 45.6% from 48.8% in the previous year, indicating less stability in equity financing. Return on equity is negative due to net losses, suggesting inefficiencies in generating shareholder returns. Overall, Covestro maintains a balanced financial structure but faces challenges in equity efficiency.

Cash Flow

Cash flow analysis indicates operational challenges. The TTM operating cash flow to net income ratio is negative due to net losses, although operating cash generation remains relatively stable. Free cash flow has turned negative in the TTM, reflecting increased capital expenditures and declining profitability. The free cash flow to net income ratio is also negative, highlighting cash flow pressures. Covestro's cash flow position suggests potential liquidity strains if trends persist.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.84B	14.18B	14.38B	17.97B	15.90B	10.71B
Gross Profit	1.95B	2.18B	2.31B	2.56B	4.43B	2.50B
EBITDA	904.00M	1.12B	1.14B	1.11B	3.06B	1.44B
Net Income	-378.00M	-266.00M	-198.00M	-272.00M	1.62B	459.00M
Balance Sheet
Total Assets	13.21B	13.63B	13.64B	14.59B	15.57B	12.92B
Cash, Cash Equivalents and Short-Term Investments	566.00M	518.00M	625.00M	1.20B	714.00M	2.17B
Total Debt	3.66B	3.10B	3.39B	3.66B	2.53B	2.89B
Total Liabilities	7.04B	6.95B	7.02B	7.46B	7.81B	7.28B
Stockholders Equity	6.15B	6.66B	6.59B	7.09B	7.70B	5.61B
Cash Flow
Free Cash Flow	-116.00M	89.00M	232.00M	138.00M	1.43B	530.00M
Operating Cash Flow	758.00M	870.00M	997.00M	970.00M	2.19B	1.23B
Investing Cash Flow	-511.00M	-423.00M	-925.00M	-477.00M	-2.00B	-1.77B
Financing Cash Flow	-318.00M	-565.00M	-639.00M	64.00M	-965.00M	1.20B

Covestro Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 60.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:1COV, the sentiment is Positive. The current price of 60.6 is above the 20-day moving average (MA) of 60.48, above the 50-day MA of 60.39, and above the 200-day MA of 58.64, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.93 is Neutral, neither overbought nor oversold. The STOCH value of 60.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:1COV.

Covestro Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BNR	66 Neutral	€7.83B	18.51	9.86%	3.87%	0.10%	-15.09%
EVK	64 Neutral	€7.81B	18.41	4.87%	7.01%	-2.62%	―
WCH	64 Neutral	€3.27B	13.57	5.37%	3.80%	-10.63%	-23.15%
SY1	63 Neutral	€11.13B	21.96	13.57%	1.50%	2.15%	29.19%
Sector *	61 Neutral	$10.09B	5.98	1.14%	3.01%	3.01%	-45.09%
LXS	56 Neutral	$2.07B	―	-3.72%	0.41%	-0.97%	-134.96%
1COV	48 Neutral	€11.17B	―	-5.90%	―	-1.98%	―