On Monday, Arkema SA (OTC:ARKAY) (AKE:FP) (OTC: ARKAF) received an upgrade from Underweight to Neutral by JPMorgan (NYSE:JPM), with a set price target of €92.00. The revision follows Arkema's first-quarter earnings report for 2024, which raised concerns about potential downward revisions to the consensus for the full year and beyond.
The financial firm's forecasts for Arkema's adjusted EBITDA in FY24 and FY25 are largely unchanged at €1.54 billion and €1.66 billion, respectively. These projections represent a flat year-over-year organic growth for FY24 and an 8% increase for FY25. However, they remain 3% and 4% below the Bloomberg consensus.
The decision to adjust the rating comes in light of recent data and commentary from Arkema's management and its peers, suggesting a slower-than-expected demand recovery. JPMorgan indicates that this new information has likely brought buy-side expectations more in line with their estimates.
Despite the cautious outlook, the firm notes that Arkema's stock price is currently trading approximately 7% below their unchanged price target of €92.00. This gap has contributed to the decision to upgrade the rating to Neutral from the previous Underweight status.
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