(CercleFinance.com) – While lowering its price target from 56 to 40 euros on Covestro, in the wake of a 26% reduction on average in its EBITDA estimates, Jefferies is raising its recommendation to ‘hold’ to ‘ purchase’ for the title of the German chemist.
‘Trading on a mid-cycle EV/EBITDA ratio of 4.3x, Covestro is a cheap cyclical name with headroom on its balance sheet to survive an economic downturn.
“Applying the most reduced NS1 gas flow scenarios to our earnings forecast implies that the stock is still trading at a discount to the three-year averages,” he continues.
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