LANXESS (LXS) AI Stock Analysis

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LANXESS

(XETRA:LXS)

Rating:57Neutral

Price Target:

€28.00

▲(3.78%Upside)

LANXESS's overall stock score is 57, primarily due to financial performance challenges and a cautious valuation. While the earnings call noted some positive strategic initiatives and improvements, the technical indicators and valuation metrics suggest a need for caution in the near term.

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

$2.37B

Dividend Yield0.36%

Average Volume (3M)298.20K

Price to Earnings (P/E)―

Beta (1Y)1.67

Revenue Growth-5.18%

EPS Growth-139.96%

CountryDE

Employees12,320

SectorBasic Materials

Sector Strength68

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)0.07

Shares Outstanding86,346,306

10 Day Avg. Volume286,531

30 Day Avg. Volume298,201

Financial Highlights & Ratios

PEG Ratio-0.57

Price to Book (P/B)0.74

Price to Sales (P/S)0.00

P/FCF Ratio-13.13

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.88

Price Target Upside3.32% Upside

Rating ConsensusHold

Number of Analyst Covering11

LANXESS Business Overview & Revenue Model

Company DescriptionLANXESS AG is a leading specialty chemicals company headquartered in Cologne, Germany. The company operates in various sectors including advanced intermediates, specialty additives, consumer protection, and engineering materials. LANXESS offers a diverse portfolio of products such as plastics, rubber, intermediates, and specialty chemicals that serve numerous industries, including automotive, construction, agriculture, and electronics. With a strong emphasis on innovation and sustainability, LANXESS is committed to providing high-quality solutions and services to its global customer base.

How the Company Makes MoneyLANXESS generates revenue primarily through the sale of its specialty chemicals and materials across its four main business segments: Advanced Intermediates, Specialty Additives, Consumer Protection, and Engineering Materials. Each segment contributes to the company's earnings by catering to specific industry needs. Advanced Intermediates provides basic and fine chemicals used in the agrochemical, pharmaceutical, and industrial sectors. Specialty Additives offers additives that enhance product performance in sectors such as plastics, lubricants, and flame retardants. The Consumer Protection segment focuses on products that ensure safety and hygiene, including preservatives and disinfectants. Engineering Materials supplies high-performance plastics and composites used in automotive and other industries. Revenue is further supported by strategic partnerships and collaborations, along with ongoing investments in research and development to innovate and expand the product portfolio, ensuring LANXESS remains competitive in the global market.

LANXESS Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 3.61%|

Next Earnings Date:Aug 14, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive achievements, such as EBITDA growth and successful divestitures, against a backdrop of macroeconomic uncertainty and operational challenges, particularly in terms of energy costs and industry utilization. While there are strategic plans to mitigate tariff impacts and leverage segment growth, the overall environment remains challenging.

Q1-2025 Updates

Positive Updates

EBITDA Increase

EBITDA increased by approximately 32%, a significant improvement over Q1 2024, despite still being at low levels.

Consumer Protection Segment Growth

The Consumer Protection segment saw a sharp increase, largely due to a weak comparable base in Q1 2024.

Successful Divestiture of Urethanes Business

The divestiture of the Urethanes business to UBE was completed faster than expected, with proceeds intended to strengthen the balance sheet.

US Tariff Impact Management

Numerous product categories are exempted from tariffs, creating a relative price advantage over Chinese competitors, which the company plans to leverage for volume and price gains.

Negative Updates

Increased Working Capital and Net Debt

Working capital increased due to sales pickups, and net debt rose as a result, following a normal seasonal pattern.

Macroeconomic Uncertainty

Increased macroeconomic uncertainty and short-term ordering patterns among clients due to tariff announcements.

Energy Cost Burden

Energy costs were a burden for Advanced Intermediates in Q1, impacting profitability.

Low Industry Utilization

The chemical industry is operating at around 70% utilization, indicating a tough trading environment.

Company Guidance

During the Q1 2025 Conference Call, Lanxess reaffirmed its guidance for the fiscal year, projecting an EBITDA between €600 million and €650 million. The company reported a 32% increase in EBITDA for Q1 compared to the previous year, although it acknowledged the figure remained at low levels. The divestiture of the Urethanes business, completed faster than anticipated, will remove an operational EBITDA of approximately €11 million to €12 million from Q2 results. The call emphasized ongoing macroeconomic uncertainties, notably the impact of tariffs and fluctuating customer order patterns, which have shifted to a one-to-two-week basis. Despite challenges, Lanxess anticipates a sequential improvement in Q2 performance, buoyed by the end of pre-buying effects and local pricing adjustments in response to tariffs. The company also addressed cost management and strategic responses to market dynamics, including the planned closure of a loss-making plant, projected to save about €10 million in future contributions.

LANXESS Financial Statement Overview

Summary

LANXESS faces challenges in revenue growth and profitability, with declining sales and weak margins. The balance sheet shows moderate leverage but negative returns on equity. Positive operating cash flows provide some stability, but declining free cash flow needs monitoring.

Income Statement

Neutral

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.

Balance Sheet

Neutral

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.36B	6.37B	6.71B	8.09B	7.56B	6.10B
	Gross Profit
1.34B	1.30B	1.27B	1.94B	1.84B	1.56B
	EBIT
6.00M	-28.00M	-668.00M	493.00M	534.00M	1.32B
	EBITDA
499.00M	543.00M	-143.00M	865.00M	673.00M	1.60B
	Net Income Common Stockholders
-136.00M	-177.00M	443.00M	185.00M	267.00M	885.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
618.00M	615.00M	496.00M	403.00M	1.23B	1.79B
	Total Assets
9.51B	9.71B	9.66B	11.29B	10.52B	8.88B
	Total Debt
0.00	3.00B	3.01B	4.23B	3.48B	2.80B
	Net Debt
-238.00M	2.70B	2.86B	3.91B	2.34B	2.53B
	Total Liabilities
5.15B	5.12B	5.16B	6.86B	6.76B	5.88B
	Stockholders Equity
4.36B	4.59B	4.50B	4.42B	3.76B	3.00B
Cash Flow		Free Cash Flow
151.00M	188.00M	512.00M	-248.00M	-72.00M	129.00M
	Operating Cash Flow
477.00M	508.00M	838.00M	159.00M	407.00M	585.00M
	Investing Cash Flow
-253.00M	-263.00M	423.00M	-1.05B	-432.00M	-353.00M
	Financing Cash Flow
-97.00M	-97.00M	-1.47B	613.00M	389.00M	-247.00M

LANXESS Technical Analysis

Technical Analysis Sentiment

Positive

Last Price26.98

Price Trends

50DMA

25.89

Positive

100DMA

27.28

Negative

200DMA

26.38

Positive

Market Momentum

MACD

0.05

Negative

RSI

52.90

Neutral

STOCH

63.61

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:LXS, the sentiment is Positive. The current price of 26.98 is above the 20-day moving average (MA) of 26.77, above the 50-day MA of 25.89, and above the 200-day MA of 26.38, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 52.90 is Neutral, neither overbought nor oversold. The STOCH value of 63.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:LXS.

LANXESS Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FPE	74 Outperform	€5.69B	16.13	15.87%	3.16%	2.58%	8.02%
BNR	67 Neutral	€8.95B	16.91	11.49%	3.40%	0.10%	-15.09%
WCH	67 Neutral	$3.23B	13.42	5.37%	3.77%	-10.63%	-23.15%
EVK	67 Neutral	€9.03B	30.21	3.25%	6.09%	0.53%	―
LXS	57 Neutral	$2.37B	―	-3.92%	0.36%	-5.18%	-139.96%
1COV	57 Neutral	€11.02B	―	-6.00%	―	0.01%	-88.69%
Sector *	51 Neutral	$2.04B	-1.15	-21.24%	3.95%	2.91%	-30.44%

* Basic Materials Sector Average

Performance Comparison

DE:LXS

LANXESS

26.98

5.01

22.83%

DE:EVK

Evonik

19.00

1.41

8.03%

DE:FPE

Fuchs Petrolub

36.75

3.96

12.08%

DE:WCH

Wacker Chemie AG

64.20

-28.08

-30.43%

DE:1COV

Covestro

59.74

8.94

17.60%

DE:BNR

Brenntag AG

60.96

-2.14

-3.39%

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.