Stifel maintains its 'hold' rating on Solvay shares, with a sharply reduced price target, from 107 euros to 28 euros, as the spin-off of Syensqo - a new entity specializing in innovation (batteries, green hydrogen, thermoplastic composites, renewable materials, biotechnologies) - takes effect.

Despite the benefits of this operation, the analyst points to the risk of short-term losses, citing in particular the oversupply of shares and uncertainties surrounding soda ash contracts for 2024.

Also pointing to "headwinds" on Soda Ash & Derivatives (SA&D), Stifel expects earnings to decline for 2024 before a potential recovery the following year.

We are below our medium-term targets, but expect cash generation to be sufficient to meet the company's main priorities in terms of cash allocation, maintenance investment and dividend.

According to Stifel, Solvay should maintain a 'very attractive' dividend policy. The company also ranks first in terms of dividend yield among the broker's coverage.

Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.