Jefferies cuts Lanxess stock price target on cost pressures

Jefferies has reduced its price target for Lanxess AG's stock to EUR11.00 from EUR14.00, while keeping an Underperform rating. The stock has fallen by 45% over the past year and is now trading at $14.07, though analysts believe the company is undervalued with a Fair Value of $17.03, making it one of the most undervalued stocks. Jefferies has lowered its EBITDA estimates by 2% on average for the German specialty chemicals company.

The firm expects third-quarter EBITDA of EUR134 million, up 7% year-over-year but 3% below consensus. They attribute the cost pressures to higher European gas prices and fading tailwinds, as utilization rates remain low and demand softens. The Advanced Industrial Intermediates segment faces significant competition from China, while the Inorganic Pigments segment awaits a broader recovery in construction-related demand.

Saltigo continues to hurt profitability in the Consumer Protection segment. Despite posting a loss of $8.85 per share over the past year, analysts expect a return to profitability this year with earnings projected at $1.12 per share. For the fiscal year 2026, Jefferies forecasts EBITDA of EUR482 million, slightly below guidance and consensus. The company expects Envalior cash realization in 2028.