Covestro (1COV) AI Stock Analysis

• Market Cap: €11.06B
• Dividend Yield: N/A
• Average Volume (3M): 17.65K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.09
• Revenue Growth: 0.01%
• EPS Growth: -88.69%
• Country: DE
• Employees: 17,578
• Sector: Basic Materials
• Sector Strength: 62
• Industry: Chemicals - Specialty
• EPS (TTM): -0.85
• Shares Outstanding: 189,000,000
• 10 Day Avg. Volume: 15,771
• 30 Day Avg. Volume: 17,654
• PEG Ratio: 0.62
• Price to Book (P/B): 1.76
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -201.68
• 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: €61.80
• Price Target Upside: 3.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 57 Neutral
• Price Target: €62.00 ▲(3.33%Upside)

Covestro's overall stock score is primarily impacted by financial performance and valuation challenges, with declining profitability and a negative P/E ratio. However, positive technical momentum offers some optimism, mitigating the downsides.

Covestro Business Overview & Revenue Model

Company Description

Covestro AG supplies high-tech polymer materials and related application solutions. It operates in two segments, Performance Materials, and Solutions & Specialties. The Performance Materials segment develops, produces, and supplies high-performance materials, such as polyurethanes and polycarbonates, and base chemicals, which include diphenylmethane diisocyanate (MDI), toluylene diisocyanate, long-chain polyols, and polycarbonate resins for use in furniture and wood processing, construction, automotive, and transportation industries, as well as roof structures, insulation for buildings and refrigerators, mattresses, car seats, and other applications. The Solutions & Specialties segment comprises a range of polymer products, including precursors for coatings and adhesives, polycarbonates, MDI specialties and polyols, specialty films, elastomers, and thermoplastic polyurethanes that are used in automotive and transportation, electrical, electronics and household appliances, construction, and healthcare industries, as well as composite resins for wind turbine, rotor blades, laptop cases, and floodlights. The company markets its products through trading houses and distributors. It operates in Europe, the Middle East, Africa, Latin America, the United States, Canada, and the People's Republic of China. The company was founded in 1863 and is headquartered in Leverkusen, Germany.

How the Company Makes Money

Covestro generates revenue primarily through the sale of its high-performance polymer materials across its three business segments. In the Polyurethanes segment, the company produces raw materials for rigid and flexible foams used in insulation, automotive seating, and mattresses. The Polycarbonates segment focuses on producing thermoplastic polymers that are utilized in applications such as automotive components, electronic devices, and medical products. The Coatings, Adhesives, and Specialties (CAS) segment provides materials for coatings, adhesives, and sealants used in various industries. Covestro's earnings are augmented by its strong emphasis on research and development, which drives innovation and helps the company maintain a competitive edge in the market. Additionally, strategic partnerships and collaborations with other industry leaders enable Covestro to expand its market reach and enhance its product offerings, contributing further to its revenue streams.

Covestro Financial Statement Overview

Summary

Covestro faces profitability and revenue growth challenges in a competitive chemical industry. Despite maintaining a stable balance sheet and generating positive cash flows, the company struggles with net losses and declining operating margins. Attention to cost management and strategic growth initiatives will be essential to improving financial performance in the future.

Income Statement

The company's gross profit margin has decreased over the years, with current values reflecting a challenging market environment. Revenue has seen some decline, notably from a high in 2022, with a negative growth trend observed recently. The net profit margin remains negative due to ongoing net losses, indicating profitability concerns. EBIT and EBITDA margins have also declined, reflecting operational challenges.

Balance Sheet

The company's debt-to-equity ratio is moderate, indicating a balanced use of debt and equity, although recent increases in debt levels are noteworthy. Return on equity is negative in recent years due to net losses, impacting shareholder returns. The equity ratio shows a relatively stable financial position with a good proportion of assets financed by equity.

Cash Flow

Free cash flow growth has been inconsistent, with recent declines. The operating cash flow to net income ratio is favorable due to strong cash flow generation relative to reported net income losses. Free cash flow to net income is positive, indicating the company generates cash even during periods of net losses, but sustainability is uncertain.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
14.15B	14.18B	14.38B	17.97B	15.90B	10.71B
	Gross Profit
2.25B	2.18B	2.31B	2.56B	4.43B	2.50B
	EBIT
53.00M	27.00M	156.00M	306.00M	2.24B	710.00M
	EBITDA
1.06B	1.12B	1.14B	1.11B	3.06B	1.44B
	Net Income Common Stockholders
-261.00M	-266.00M	-198.00M	-281.00M	1.62B	459.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
789.00M	518.00M	625.00M	1.20B	714.00M	2.17B
	Total Assets
14.05B	13.63B	13.64B	14.59B	15.57B	12.92B
	Total Debt
3.71B	3.10B	3.39B	3.66B	2.53B	2.89B
	Net Debt
2.96B	2.59B	2.77B	2.46B	1.88B	1.49B
	Total Liabilities
7.63B	6.95B	7.02B	7.46B	7.81B	7.28B
	Stockholders Equity
6.41B	6.66B	6.59B	7.09B	7.70B	5.61B
Cash Flow		Free Cash Flow
-169.00M	89.00M	232.00M	138.00M	1.43B	530.00M
	Operating Cash Flow
557.00M	870.00M	997.00M	970.00M	2.19B	1.23B
	Investing Cash Flow
-814.00M	-423.00M	-925.00M	-477.00M	-2.00B	-1.77B
	Financing Cash Flow
-262.00M	-565.00M	-639.00M	64.00M	-965.00M	1.20B

Covestro Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 60.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 is above the 20-day moving average (MA) of 59.91, above the 50-day MA of 59.21, and above the 200-day MA of 57.69, indicating a bullish trend. The MACD of 0.23 indicates Positive momentum. The RSI at 55.44 is Neutral, neither overbought nor oversold. The STOCH value of 67.61 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
1COV	57 Neutral	€11.06B	―	-6.00%	―	0.01%	-88.69%
Sector *	51 Neutral	$2.02B	-1.14	-21.37%	3.64%	2.88%	-30.57%
0MPT		€8.81B	16.58	11.49%	3.45%	―	―
0QDS		€8.90B	29.81	3.25%	6.12%	―	―
0G6T		€14.50B	30.41	12.56%	1.16%	―	―
LNXSF		$2.54B	―	-3.92%	0.36%	―	―
WKCMF		$3.52B	13.67	5.37%	3.77%	―	―