LANXESS (LXS) AI Stock Analysis

• Market Cap: $1.47B
• Dividend Yield: 0.58%
• Average Volume (3M): 509.31K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.65
• Revenue Growth: -2.75%
• EPS Growth: 83.47%
• Country: DE
• Employees: 12,320
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): -0.07
• Shares Outstanding: 86,346,306
• 10 Day Avg. Volume: 682,552
• 30 Day Avg. Volume: 509,309
• PEG Ratio: 0.08
• Price to Book (P/B): 0.44
• Price to Sales (P/S): 0.32
• P/FCF Ratio: 10.83
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $21.66
• Price Target Upside: 26.09% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 45 Neutral
• Price Target: €16.50 ▼(-3.96% Downside)

LANXESS faces significant financial and operational challenges, reflected in its financial performance and technical analysis scores. The company's declining revenues, negative profitability, and bearish technical indicators weigh heavily on the stock score. While the valuation suggests potential undervaluation, the negative earnings and low dividend yield are concerning. The earnings call highlighted ongoing challenges and mixed sentiment, but it was excluded from the weighted calculation due to the methodology.

Positive Factors

Stable Consumer Protection Segment

The Consumer Protection segment's stability and high margins provide a reliable revenue stream, supporting overall financial health despite challenges in other areas.

Effective Cash Management

Effective cash management ensures financial stability and flexibility, allowing LANXESS to navigate economic uncertainties and invest in strategic initiatives.

Cost and Efficiency Programs

Ongoing cost and efficiency programs are expected to enhance profitability and competitiveness, positioning the company for long-term growth.

Negative Factors

Declining Revenue and Profitability

Declining revenue and profitability indicate operational challenges, potentially limiting the company's ability to invest in growth and innovation.

Weak Demand in Key Segments

Weak demand in key segments like Specialty Additives can hinder revenue growth and margin expansion, impacting long-term financial performance.

Impact of Currency Fluctuations

Currency fluctuations pose a risk to financial stability, affecting international competitiveness and profitability in the long term.

LANXESS Business Overview & Revenue Model

Company Description

LANXESS 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 Money

LANXESS 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 Financial Statement Overview

Summary

LANXESS is experiencing financial pressure with declining revenues and profitability, particularly in the TTM period. While the balance sheet shows moderate leverage, the negative return on equity and declining cash flow metrics highlight operational and financial challenges. The company needs to address these issues to improve its financial health and shareholder value.

Income Statement

LANXESS has faced declining revenue and profitability in recent periods, with a negative net profit margin of -2.68% in the TTM. The gross profit margin is relatively stable at 21.19%, but the EBIT and EBITDA margins are weak, indicating operational challenges. Revenue growth has been negative, reflecting a challenging market environment.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.62, suggesting manageable leverage. However, the return on equity is negative at -3.81%, indicating inefficiencies in generating returns for shareholders. The equity ratio is reasonable, showing a stable capital structure.

Cash Flow

LANXESS's cash flow situation is mixed, with a decline in free cash flow growth by -25.83% in the TTM. The operating cash flow to net income ratio is 0.38, indicating some ability to convert earnings into cash. However, the free cash flow to net income ratio is low, reflecting challenges in generating free cash flow.

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

• Technical Analysis Sentiment: Negative
• Last Price: 17.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 17.18 is below the 20-day moving average (MA) of 20.33, below the 50-day MA of 21.57, and below the 200-day MA of 25.32, indicating a bearish trend. The MACD of -0.91 indicates Positive momentum. The RSI at 22.26 is Positive, neither overbought nor oversold. The STOCH value of 10.86 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FPE	74 Outperform	€4.48B	13.47	16.00%	3.78%	1.42%	-0.40%
EVK	70 Neutral	€6.67B	15.73	1.08%	8.33%	-5.92%	-58.33%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
BNR	60 Neutral	€6.80B	16.07	9.86%	4.54%	-1.30%	-28.95%
WCH	58 Neutral	$3.34B	13.86	―	3.68%	-10.63%	-23.15%
1COV	52 Neutral	€10.95B	-29.67	-5.90%	―	-1.98%	-16.31%
LXS	45 Neutral	$1.47B	―	-3.72%	0.58%	-2.75%	83.47%

LANXESS Corporate Events

Lanxess Earnings Call: Stability Amid Challenges

The recent earnings call for Lanxess (OTC) painted a mixed picture of the company’s current standing and future outlook. While there is stability in the Consumer Protection segment and effective cash management practices, the overall sentiment was tempered by significant declines in sales and EBITDA, weak demand in key segments, currency fluctuations, and geopolitical challenges. The potential for job cuts and the need for structural improvements further underscore the challenging environment the company is navigating.

Lanxess Earnings Call: Mixed Sentiments Amid Challenges

During the recent earnings call, Lanxess (OTC) presented a mixed sentiment, with highlights of effective working capital management and strategic divestitures. However, 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.