Deutsche Bank lowers Arkema stock price target to €76 on weak demand

Deutsche Bank lowered its price target on Arkema SA (EPA:AKE) to €76.00 from €80.00, while maintaining a Buy rating, citing persistent weak demand conditions that led to a roughly 3% reduction in its 2025 underlying EBITDA forecast to €1.307 billion, now positioning it below Bloomberg consensus. Despite anticipating near-term share price pressure due to a lack of catalysts, the bank affirmed its Buy recommendation based on Arkema's attractive valuation at 11x 2025 estimated P/E and 6x 2025 estimated EV/EBITDA, indicating a more constructive outlook for 2026 and beyond.

Analysis

Deutsche Bank has revised its outlook on Arkema SA (AKE), lowering the price target to €76.00 from €80.00 while reiterating a Buy rating. The adjustment is driven by persistent weak demand conditions, prompting a reduction in the bank's 2025 underlying EBITDA forecast by approximately 3% to €1.307 billion. This revised forecast is notable as it sits at the low end of Arkema's own €1.3-1.4 billion guidance and is roughly 3% below the current Bloomberg consensus of €1.342 billion. The downgrade extends to the third quarter of 2025, with projected EBITDA now €331 million, which is about 5% below consensus. Furthermore, earnings per share estimates for 2025-2027 have been negatively impacted by expectations of higher financial charges. Despite these downward revisions and the caution that a lack of near-term catalysts may keep the share price under pressure, the bank's Buy recommendation is anchored by valuation. Arkema is viewed as attractively priced at an estimated 11x 2025 P/E and 6x 2025 EV/EBITDA, supporting a constructive outlook for 2026 and beyond.

Key Decisions for Investors

• Value-oriented investors with a long-term horizon may find the current valuation attractive, as the maintained Buy rating suggests the recent forecast cuts are priced in, presenting a potential entry point ahead of a more constructive outlook for 2026.
• Investors should be aware of near-term risks, as downward earnings revisions and a stated lack of catalysts could lead to continued share price underperformance until there are clear signs of a recovery in demand.
• Monitor upcoming quarterly reports for any stabilization in end-market demand and watch for shifts in consensus EBITDA estimates, as these will be key indicators for a potential re-rating of the stock.