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Covestro
(Frankfurt:1COV)
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Rating:47Neutral
Price Target:
€60.00
▲(0.17% Upside)
Action:Reiterated
Date:08/04/26
The score is held down primarily by deteriorating financial performance (multi-year losses, negative 2025 EBIT, and weakening cash generation with negative 2025 free cash flow). Technicals provide some support (price above major moving averages and positive MACD), but momentum looks stretched (high RSI/Stoch). Valuation remains pressured due to loss-making earnings and no dividend yield data.
Positive Factors
Balance-sheet resilience
Covestro’s sizeable equity base and moderate debt provide a durable financial cushion. This balance-sheet strength lowers refinancing risk, preserves liquidity and gives management flexibility to fund capex or bridge cyclical downturns, supporting stability over the next several months.
Negative Factors
Deteriorating revenue and multi-year losses
Consecutive top-line declines and multi-year net losses point to structural weakness in demand or pricing. Persistent revenue contraction erodes operating leverage, limits reinvestment and undermines recovery prospects, increasing the risk of prolonged underperformance over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet resilience
Covestro’s sizeable equity base and moderate debt provide a durable financial cushion. This balance-sheet strength lowers refinancing risk, preserves liquidity and gives management flexibility to fund capex or bridge cyclical downturns, supporting stability over the next several months.
Read all positive factors
Covestro (1COV) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€12.56B
Dividend YieldN/A
Average Volume (3M)10.68K
Price to Earnings (P/E)―
Beta (1Y)0.07
Revenue Growth-8.72%
EPS Growth-140.66%
CountryDE
Employees17,598
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-1.67
Shares Outstanding207,900,000
10 Day Avg. Volume11,737
30 Day Avg. Volume10,682
Financial Highlights & Ratios
PEG Ratio-0.12
Price to Book (P/B)1.63
Price to Sales (P/S)0.88
P/FCF Ratio-40.23
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.3
Revenue Forecast (FY)€12.92B
Covestro Business Overview & Revenue Model
Company Description
Covestro AG is a leading supplier of advanced polymer materials and customized application solutions. The company's operations are organized into two main divisions: Performance Materials, and Solutions & Specialties. The Performance Materials div...
How the Company Makes Money
Covestro makes money primarily by manufacturing and selling polymer materials and chemical intermediates to industrial customers under supply contracts and spot/market-based sales, with revenue largely tied to sales volumes and market pricing for ...
Covestro Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Negative
The quarter shows clear operational and market challenges: a sizable sales decline (-12% YoY), EBITDA pressures (-15.7% YoY) and a material guidance downgrade to EUR 700–800 million for FY2025 driven by pricing, FX and the Dormagen incident (estimated up to EUR 150m). Offsets include successful cost-savings that supported Q3 EBITDA, a positive Q3 free operating cash flow (EUR 111m), a EUR 75m insurance reimbursement, strategic acquisitions to expand aliphatics capacity, and maintained credit metrics with Moody's confirming an investment-grade rating. Overall, the negative financial trends and the significant guidance reduction outweigh the mitigating positives.Positive Updates
Strategic Acquisitions and Capacity Expansion
Completed purchase of Pontacol in Q3 2025 and signed agreement to acquire 2 HDI derivative production facilities from Vencorex (Rayong, Thailand and Freeport, U.S.) expected to close in Q1 2026. Deal expands aliphatics footprint in U.S. and APAC, expected to add a low double-digit million euro EBITDA and deliver synergies of up to high double-digit million euros within five years.
Negative Updates
Significant Sales Decline
Q3 2025 sales fell 12% year-over-year to EUR 3.2 billion. The sales decrease was driven primarily by negative pricing (-7 percentage points), adverse foreign exchange impacts (-3.5 percentage points), and lower volumes (-1.5 percentage points).
Read all updates
Q3-2025 Updates
Positive
Negative
Strategic Acquisitions and Capacity Expansion
Completed purchase of Pontacol in Q3 2025 and signed agreement to acquire 2 HDI derivative production facilities from Vencorex (Rayong, Thailand and Freeport, U.S.) expected to close in Q1 2026. Deal expands aliphatics footprint in U.S. and APAC, expected to add a low double-digit million euro EBITDA and deliver synergies of up to high double-digit million euros within five years.
Read all positive updates
Company Guidance
Covestro narrowed its FY2025 guidance, now targeting EBITDA of EUR 700–800 million (midpoint EUR 750m, down from a Feb midpoint of EUR 1.3bn and a July midpoint of EUR 900m), free operating cash flow of -EUR 400 to -EUR 200 million (9M FOCF -EUR 370m; Q3 FOCF +EUR 111m), and sales around EUR 13.0 billion (Q3 sales EUR 3.2bn); CapEx remains guided at EUR 700–800m (9M CapEx EUR 556m), ROCE above WACC is forecast at -9 to -8 percentage points, greenhouse gas emissions are narrowed to 4.2–4.4 million tonnes, total net debt rose EUR 292m vs end‑2024 with a net‑debt/EBITDA of 3.8x (4‑quarter rolling EBITDA EUR 0.8bn), and the Dormagen incident is expected to burden FY EBITDA by up to EUR 150m (EUR 75m insurance payment received, EUR 25m deductible, coverage expected above EUR 100m); management also flagged pulling forward low‑ to mid‑double‑digit million euro restructuring costs into 2025 as a mitigation measure.Covestro Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
58
Neutral
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.81B | 12.94B | 14.18B | 14.38B | 17.97B | 15.90B |
| Gross Profit | 1.95B | 1.72B | 2.18B | 2.31B | 2.56B | 4.43B |
| EBITDA | 1.03B | 752.00M | 1.12B | 1.14B | 1.65B | 3.06B |
| Net Income | -305.00M | -644.00M | -266.00M | -198.00M | -281.00M | 1.62B |
Balance Sheet | ||||||
| Total Assets | 13.88B | 13.47B | 13.63B | 13.64B | 14.59B | 15.57B |
| Cash, Cash Equivalents and Short-Term Investments | 984.00M | 767.00M | 518.00M | 625.00M | 1.20B | 714.00M |
| Total Debt | 2.83B | 3.13B | 3.10B | 3.39B | 3.66B | 2.53B |
| Total Liabilities | 6.53B | 6.45B | 6.95B | 7.02B | 7.46B | 7.81B |
| Stockholders Equity | 7.32B | 7.00B | 6.66B | 6.59B | 7.09B | 7.70B |
Cash Flow | ||||||
| Free Cash Flow | 111.00M | -283.00M | 89.00M | 232.00M | 138.00M | 1.43B |
| Operating Cash Flow | 913.00M | 487.00M | 870.00M | 997.00M | 970.00M | 2.19B |
| Investing Cash Flow | -1.01B | -1.29B | -423.00M | -925.00M | -477.00M | -2.00B |
| Financing Cash Flow | 88.00M | 968.00M | -565.00M | -639.00M | 64.00M | -965.00M |
Covestro Technical Analysis
59.90
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:1COV, the sentiment is undefined. The current price of 59.9 is equal to the 20-day moving average (MA) of ―, equal to the 50-day MA of ―, and equal to the 200-day MA of ―, indicating a neutral trend. The MACD of ― indicates undefined momentum. The RSI at ― is undefined, neither overbought nor oversold. The STOCH value of ― is undefined, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a undefined sentiment for DE:1COV.
Covestro Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | €4.79B | 15.08 | 17.00% | 3.53% | 5.53% | 17.05% | |
64 Neutral | €8.41B | 69.76 | 1.49% | 5.85% | -4.03% | -71.46% | |
63 Neutral | €8.86B | 24.36 | 8.30% | 3.22% | -5.28% | -13.76% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
57 Neutral | €4.70B | -10.71 | -11.14% | 2.82% | ― | ― | |
55 Neutral | €1.29B | -1.93 | -18.62% | 0.65% | -9.81% | -305.46% | |
47 Neutral | €12.56B | -17.91 | -9.70% | ― | -8.72% | -140.66% |
* Basic Materials Sector Average
DE:1COV
Covestro
60.50
-0.08
-0.13%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.