Covestro share: Has the stock market exaggerated? Analysts are positive about acquisitions

On the latest news from Covestro, there was a current analyst vote these days. The chemical company from Leverkusen wants to take over the Resins & Functional Materials division from DSM. The purchase price is around 1.6 billion euros. This corresponds to around 20 percent of Covestro’s market capitalization. “The integration of RFM will increase sales by around 1 billion euros and EBITDA by 141 million euros (2019),” the company announced. It is expected that the acquisition can be completed in the first quarter of the coming year. Among other things, the antitrust authorities still have to give their approval. The company wants to achieve permanent synergy effects with a volume of 120 million euros annually from the takeover starting at 225.

The Jefferies then issued a buy recommendation for Covestro shares with a price target of 55 euros. A positive effect on Covestro’s earnings per share is expected in the coming year – despite an increasing number of shares.

DZ Bank is increasing its fair value for Covestro. After 51 euros previously, this is now seen at 53 euros. The analysts rate the announced takeover as positive and assume that Covestro will be able to generate added value from the acquisition from 2022.

Nord LB analysts believe that the transaction makes strategic sense. There is a diversification of the customer industries and a broader geographical coverage. The analysts consider the purchase price to be reasonable. They confirm the hold recommendation for Covestro shares. The price target increases from EUR 34.00 to EUR 43.00. From their point of view, the reaction of the stock exchange to the purchase was exaggeratedly negative.

After the announcement, the analysts of Deutsche Bank renew their buy recommendation for the shares of Covestro. The price target for Covestro shares remains at EUR 52.00.
The new acquisition fits Covestro’s business and is seen as a good addition. This will enable Covestro to gain additional market share and underpin its position as a global leader in numerous markets.

The Baader analysts continue to rate the Covestro shares as “add” after the purchase announcement. Here, as before, the price target is EUR 48.00. At first glance, the experts rate the purchase price as quite high, while at the same time referring to the synergy effects.

At a glance – chart and news: Covestro


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