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LANXESS (DE:LXS)
XETRA:LXS
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LANXESS
(XETRA:LXS)
Rating:47Neutral
Price Target:
€25.00
▲(2.38% Upside)
Positive Factors
Rebound in Segments
Q2 details showed a rebound in all three segments supported by 5% volume growth.
Sales Expansion
Lanxess highlights that the share of US sales has increased to 28% compared to just 15% before the major four acquisitions in the US.
Volume Growth
Advanced Intermediates achieved 16% year-over-year volume growth, driven by Inorganic Pigments due to market share gains.
Negative Factors
Decline in Automotive Demand
Envalior at equity contribution showed a decline due to low demand from automotive OEM in Q3.
High Leverage
Net debt at €2.57m translating to net debt / EBITDA of 4.4x on FY-24 earnings indicates high leverage.
Supply Issues
Supply issues at F&F look set to continue until year-end and agro demand at Saltigo is likely to remain weak.
LANXESS (LXS) vs. iShares MSCI Germany ETF (EWG)
Market Cap
$2.16B
Dividend Yield0.41%
Average Volume (3M)346.76K
Price to Earnings (P/E)―
Beta (1Y)1.75
Revenue Growth-2.75%
EPS Growth83.47%
CountryDE
Employees12,320
SectorBasic Materials
Sector Strength65
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.59
Shares Outstanding86,346,306
10 Day Avg. Volume373,886
30 Day Avg. Volume346,757
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.98
Enterprise Value/Revenue0.69
Enterprise Value/Gross Profit3.27
Enterprise Value/Ebitda8.05
Forecast
1Y Price Target
$25.43Price Target Upside4.15% Upside
Rating ConsensusHold
Number of Analyst Covering12
LANXESS Business Overview & Revenue Model
Company DescriptionLANXESS Aktiengesellschaft, a specialty chemicals company, develops, manufactures, and markets chemical intermediates, additives, specialty chemicals, and plastics worldwide. It operates through four segments: Advanced Intermediates, Specialty Additives, Consumer Protection, and Engineering Materials. The Advanced Intermediates segment provides advanced industrial intermediates, basic and fine chemicals, organometallics, and inorganic pigments for the agrochemical, automotive, construction, aromas and flavors, semiconductors and photovoltaic, and color pigments industries. The Specialty Additives segment offers additives, including lubricants, flame retardants, plasticizers, and bromine derivatives for various applications of rubber, plastic, paint, construction, and electrical industries. The Consumer Protection segment provides material protection products; disinfectant, hygiene, and preservative solutions; flavors and fragrances; and precursors and intermediates for the agrochemicals, pharmaceuticals, and specialty chemicals industries, as well as technologies for the treatment of water and other liquids. The Engineering Materials segment produces technical plastics, glass fibers, fiber composites, and elastomers on a urethane basis for application in the automotive and electrical/electronics, construction, and medicine industries, as well as sports and leisure sectors. The company was founded in 1863 and is headquartered in Cologne, Germany.
How the Company Makes MoneyLANXESS generates revenue primarily through the sale of its specialized chemical products across diverse industries. Its key revenue streams include the production and sale of synthetic rubber used in tires and automotive applications, specialty additives that enhance the performance and durability of products, and high-quality color pigments utilized in coatings and plastics. The company also benefits from strategic partnerships with major players in the automotive and construction sectors, which help to secure long-term contracts and consistent demand. Additionally, LANXESS invests in research and development to innovate and improve its product offerings, allowing it to maintain a competitive edge and capture new market opportunities, further contributing to its earnings.
LANXESS Earnings Call Summary
Earnings Call Date:Aug 14, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Negative
The earnings call highlighted effective working capital management and strategic divestitures, but these positives were overshadowed by significant declines in EBITDA, ongoing challenges in key markets, competitive pressures from China, and a cautious outlook for Q3 2025.Q2-2025 Updates
Positive Updates
Stable Working Capital Management
LANXESS maintained stable working capital in Q2 2025, with a notable improvement in inventory management and receivables collection, resulting in a positive free cash flow of EUR 31 million.
Successful Strategic Divestiture
The divestiture of the urethane business was completed, contributing to a reduction in net debt from EUR 2.5 billion to EUR 2.1 billion, highlighting strategic financial management.
Closure of Hexane Oxidation Plant
The accelerated closure of the Hexane oxidation plant by June 2025 is expected to result in annual savings of EUR 10 million and supports sustainability goals by reducing CO2 footprint.
Negative Updates
Significant Decline in EBITDA
EBITDA for Q2 2025 fell to EUR 150 million from EUR 181 million in the previous year, driven by lower volumes, pricing pressure, and the impact of portfolio changes.
Challenging Market Conditions
The company faced tough market conditions across key segments, notably in automotive, capital goods, and chemicals, with demand depressed and high volatility.
Impact of Chinese Competition
Increased pressure from Chinese products, particularly in the intermediates segment, has affected LANXESS' performance in Europe and Latin America.
Uncertain Outlook for Q3 2025
Due to continued uncertainty and weak market conditions, Q3 2025 is expected to be weaker than Q2, with no expected pickup from government stimulus programs in the short term.
Company Guidance
During the LANXESS Q2 2025 Results Conference Call, the company provided a revised earnings guidance for the fiscal year 2025, adjusting its projections to an EBITDA range of EUR 520 million to EUR 580 million due to persistent macroeconomic challenges. In Q2 2025, LANXESS experienced a decline in sales volumes by nearly 4%, with EBITDA falling to EUR 150 million from EUR 181 million in the previous year, largely driven by volume, price, and portfolio effects. The company managed to maintain stable working capital, driven by a reduction in receivables, which contributed to a positive free cash flow of EUR 31 million in Q2. LANXESS also highlighted strategic operational adjustments, including the closure of its Hexane oxidation plant and the planned shutdown of its Widnes site to enhance efficiency and cost-effectiveness. Looking forward, the company anticipates continued pressure in Q3 2025 but remains cautiously optimistic about a potential demand recovery in 2026, supported by low inventory levels and an improved cost structure.LANXESS Financial Statement Overview
Summary
LANXESS faces challenges in revenue growth and profitability, with declining sales and margins. The balance sheet shows moderate leverage but negative returns on equity. Positive cash flows provide a buffer, but declining free cash flow needs monitoring.Income Statement
LANXESS has shown a declining revenue trend with revenues decreasing from 2020 to 2024. Gross Profit Margin for 2024 is approximately 20.4%, which is moderate, but the Net Profit Margin is negative due to a net loss. The EBIT and EBITDA margins are weak, indicating operational challenges and profitability issues.60
Neutral
Balance Sheet
The Debt-to-Equity Ratio for 2024 is approximately 0.65, which indicates a moderate level of leverage. The Return on Equity has been negative, reflecting recent losses. The Equity Ratio is around 47.2%, suggesting a balanced proportion of equity financing, but overall financial stability is hampered by declining equity returns.55
Neutral
Cash Flow
Operating Cash Flow is positive, but Free Cash Flow has decreased significantly from past years. The Operating Cash Flow to Net Income ratio is strong, indicating efficient cash generation relative to accounting profits, although recent net losses impact overall cash flow health.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.15B | 6.37B | 6.71B | 8.09B | 7.56B | 6.10B |
| Gross Profit | 1.30B | 1.30B | 1.27B | 1.94B | 1.84B | 1.56B |
| EBITDA | 530.00M | 543.00M | -143.00M | 865.00M | 673.00M | 1.60B |
| Net Income | -165.00M | -177.00M | 443.00M | 185.00M | 267.00M | 885.00M |
Balance Sheet | ||||||
| Total Assets | 8.43B | 9.71B | 9.66B | 11.29B | 10.52B | 8.88B |
| Cash, Cash Equivalents and Short-Term Investments | 625.00M | 615.00M | 496.00M | 403.00M | 1.23B | 1.79B |
| Total Debt | 2.49B | 3.00B | 3.01B | 4.23B | 3.48B | 2.80B |
| Total Liabilities | 4.43B | 5.12B | 5.16B | 6.86B | 6.76B | 5.88B |
| Stockholders Equity | 3.99B | 4.59B | 4.50B | 4.42B | 3.76B | 3.00B |
Cash Flow | ||||||
| Free Cash Flow | 112.00M | 188.00M | 512.00M | -248.00M | -72.00M | 129.00M |
| Operating Cash Flow | 441.00M | 508.00M | 838.00M | 159.00M | 407.00M | 585.00M |
| Investing Cash Flow | 356.00M | -263.00M | 423.00M | -1.05B | -432.00M | -353.00M |
| Financing Cash Flow | -596.00M | -97.00M | -1.47B | 613.00M | 389.00M | -247.00M |
LANXESS Technical Analysis
Negative
24.42
Price Trends
25.14
Negative
25.47
Negative
25.95
Negative
Market Momentum
-0.01
Negative
49.69
Neutral
82.56
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:LXS, the sentiment is Negative. The current price of 24.42 is below the 20-day moving average (MA) of 24.66, below the 50-day MA of 25.14, and below the 200-day MA of 25.95, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 49.69 is Neutral, neither overbought nor oversold. The STOCH value of 82.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:LXS.
LANXESS Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.31B | 6.18 | 0.76% | 2.94% | 3.30% | -36.34% | |
47 Neutral | $2.16B | ― | -3.72% | 0.41% | -2.75% | 83.47% | |
| ― | €7.82B | 18.69 | 9.86% | ― | ― | ― | |
| ― | €10.99B | ― | -5.90% | ― | ― | ― | |
| ― | €7.89B | 18.90 | 4.87% | ― | ― | ― | |
67 Neutral | €4.80B | 14.57 | 16.29% | 3.65% | 2.35% | -0.09% | |
| ― | $3.86B | 15.19 | 5.37% | 3.60% | ― | ― |
* Basic Materials Sector Average
Performance Comparison
DE:LXS
LANXESS
24.42
-0.95
-3.76%
GB:0MPT
Brenntag AG
54.00
-10.88
-16.77%
GB:0RBE
Covestro
60.04
4.31
7.73%
GB:0QDS
Evonik
16.84
-1.94
-10.33%
DE:FPE
Fuchs Petrolub
31.75
1.62
5.38%
WKCMF
Wacker Chemie AG
78.66
-12.09
-13.32%
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.