(AOF) – Brenntag (+4.72% to 60.82 euros) occupies first place in the DAX index after Berenberg switched to purchasing its title with a price target maintained at 76 euros. For the broker “the time has come to buy” as the German distributor of chemical products has seen its stock fall by more than 25% since the start of the year. Berenberg expects organic gross profit growth of 4.5% in 2025, compared to a consensus of 3.9%, with adjusted earnings per share of 5.36 euros, compared to a consensus of 5.22 euros.
Berenberg does not expect a significant recovery in volumes, but a more stable recovery in prices towards the end of the year. The rebound in year-over-year volumes should be apparent from the first quarter of 2025. The broker notes that the strengthening of the US dollar is positive for Brenntag's business in North America. Chemicals exposed in the United States are also expected to benefit from Donald Trump's policies, with Brenntag a potential beneficiary of near-term growth in the United States.
It is positive that Brenntag is no longer seeking to legally split its Essentials and Specialties businesses, Berenberg believes, because this means an additional cash return. Brenntag will continue to move away from a full-line model, including establishing separate sales teams for each division, which the manager believes must be the current priority.
As the German economy struggles to grow, a likely coalition government around the CDU formed after the 2025 elections would bring pro-growth reforms, “which can only be positive for the growth of the manufacturing industry , and therefore for chemicals”.
