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Lanxess (OTC) (DE:LXS)
:LXS
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LANXESS
(OTC:LXS)
Rating:58Neutral
Price Target:
€27.00
▲(12.31% 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
€2.08B
Dividend Yield0.43%
Average Volume (3M)351.31K
Price to Earnings (P/E)―
Beta (1Y)1.72
Revenue Growth-0.97%
EPS Growth-134.96%
CountryDE
Employees12,320
SectorBasic Materials
Sector Strength57
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.23
Shares Outstanding86,346,306
10 Day Avg. Volume330,372
30 Day Avg. Volume351,307
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€26.90Price Target Upside11.89% Upside
Rating ConsensusHold
Number of Analyst Covering11
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 makes money primarily through the sale of its specialty chemical products to a diverse range of industries worldwide. Its revenue model is driven by its four main segments: Advanced Intermediates, Specialty Additives, Consumer Protection, and Engineering Materials. Each of these segments focuses on providing high-value chemical solutions tailored to industry-specific needs. Key revenue streams include the sale of chemical intermediates used in agricultural and industrial applications, additives that enhance the performance of plastics and lubricants, and high-performance engineering plastics for automotive and electronic applications. Additionally, strategic partnerships and joint ventures, such as those in the rubber and plastics industries, contribute to the company's earnings by expanding its market reach and technological capabilities.
LANXESS Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -7.68%|
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, reflected in declining sales and margins. The balance sheet indicates moderate leverage but negative returns on equity. Cash flows remain positive, providing a buffer against operational setbacks, 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 | 6.36B | 6.37B | 6.71B | 8.09B | 7.56B | 6.10B |
| Gross Profit | 1.34B | 1.30B | 1.27B | 1.94B | 1.84B | 1.56B |
| EBITDA | 499.00M | 543.00M | -143.00M | 865.00M | 673.00M | 1.60B |
| Net Income | -136.00M | -177.00M | 443.00M | 185.00M | 267.00M | 885.00M |
Balance Sheet | ||||||
| Total Assets | 9.51B | 9.71B | 9.66B | 11.29B | 10.52B | 8.88B |
| Cash, Cash Equivalents and Short-Term Investments | 618.00M | 615.00M | 496.00M | 403.00M | 1.23B | 1.79B |
| Total Debt | 0.00 | 3.00B | 3.01B | 4.23B | 3.48B | 2.80B |
| 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
Negative
24.04
Price Trends
25.68
Negative
26.21
Negative
26.09
Negative
Market Momentum
-0.42
Positive
36.19
Neutral
4.34
Positive
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 24.04 is below the 20-day moving average (MA) of 25.48, below the 50-day MA of 25.68, and below the 200-day MA of 26.09, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 36.19 is Neutral, neither overbought nor oversold. The STOCH value of 4.34 is Positive, 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 |
|---|---|---|---|---|---|---|---|
67 Neutral | €7.89B | 14.92 | 11.49% | 3.93% | 0.10% | -15.09% | |
66 Neutral | €4.66B | 13.91 | 16.29% | 3.76% | 2.35% | -0.09% | |
64 Neutral | €7.75B | 18.29 | 4.87% | 7.18% | -2.62% | ― | |
64 Neutral | €3.18B | 13.18 | 5.37% | 3.91% | -10.63% | -23.15% | |
61 Neutral | $9.67B | 7.09 | -0.14% | 3.12% | 3.13% | -55.47% | |
58 Neutral | €2.08B | ― | -3.00% | 0.43% | -0.97% | -134.96% | |
48 Neutral | €11.12B | ― | -5.90% | ― | -1.98% | ― |
* Basic Materials Sector Average
Performance Comparison
DE:LXS
LANXESS
24.04
2.42
11.21%
DE:EVK
Evonik
16.64
-0.43
-2.55%
DE:FPE
Fuchs Petrolub
30.85
0.43
1.41%
DE:WCH
Wacker Chemie AG
63.95
-17.88
-21.85%
DE:1COV
Covestro
60.34
7.14
13.42%
DE:BNR
Brenntag AG
54.68
-6.69
-10.89%
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.