Berenberg has moved Arkema SA (EPA: AKE) from a "buy" to a "hold" rating and left a price target of €62 on the shares, after the stock rose 19% year-to-date to trade at €62.30.
The change follows a dramatic jump in acrylic acid economics tied to geopolitical developments. Analyst Sebastian Bray noted that spreads for acrylic acid minus propylene climbed from under $200 per tonne to more than $900 per tonne in a matter of weeks amid the Iran conflict. Berenberg estimates that the move could contribute in excess of €100 million to Arkema's 2026 EBITDA.
Despite that boost, Bray warned that several drivers behind the stock's improvement - most notably the surge in acrylics margins induced by the Iran-related supply disruption - are likely to be temporary and could unwind as trade routes reopen.
To quantify the risk of reversing gains, Berenberg applied its AI nowcasting tool, ChemCast. The model projects only 2% upside versus Visible Alpha consensus Q1 EBITDA estimates for 2026, and it identifies a 10.3% downside risk to 2027 consensus EBITDA of €1.37 billion. The bank's own model forecast for 2027 stands at €1.23 billion, with the gap largely ascribed to expected margin normalisation if the Strait of Hormuz reopens.
On the forecasts, the brokerage raised its 2026 sales estimate by 4.6% to €9.31 billion and lifted 2026 EBIT by 38.4% to €643 million. Adjusted EPS for 2026 was revised up 42.5% to €5.54. Berenberg's EPS estimates for subsequent years are €4.67 in 2027 and €5.28 in 2028, which imply a negative EPS compound annual growth rate of 9.6% through 2028.
Valuation is derived from a sum-of-the-parts exercise using 2027 earnings and a 6x multiple on 2026 EV/EBITDA, roughly in line with historical averages. Under Berenberg's segmentation:
- Advanced Materials is assigned a 7.4x multiple on €624 million of EBITDA, implying an enterprise value of €4.62 billion.
- Adhesive Solutions is valued at 6.8x on €383 million of EBITDA, or €2.61 billion.
- Coatings Solutions is set at 5x on €207 million of EBITDA, yielding €1.03 billion.
- Intermediates are valued at 4x on €159 million of EBITDA, implying €638 million.
From the aggregated enterprise value the brokerage subtracts €4.56 billion of debt, €800 million of hybrid debt, €340 million of pension liabilities and €189 million of minority interests, then adds €2.19 billion in cash and €42 million of investments to arrive at an implied equity value of €4.69 billion. That figure equates to the stated price target of €62 per share based on 75.5 million shares outstanding.
On leverage metrics, net debt to EBITDA is modelled at 2.5x in 2025, improving to 2.2x in 2026 before widening slightly to 2.3x in 2027. Dividend policy in the forecasts remains steady with a per-share dividend of €3.60 across all years, representing a 5.8% yield on the current price. Payout ratios are projected at 65% in 2026 and increase to 77.2% in 2027.
Free cash flow per share is forecast at €7.31 in 2026, declining to €6.15 in 2027, according to Berenberg's model.
Bray highlighted structural demand issues as well, noting that Arkema's volumes remain below pre-pandemic levels and have not shown consistent growth since the mid-2010s. He added that a corporate break-up scenario that included selling the adhesives business at an 8-9x EV/EBITDA multiple "could, in our view, yield over EUR70/share of value."
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