FRANKFURT (dpa-AFX) - More optimistic analysts' expectations for the chemical industry only briefly boosted the share prices of Lanxess and Wacker Chemie on Friday. While the situation on the stock market remained generally tense, the initial tailwind for the sector's stocks quickly faded.

Lanxess and Wacker Chemie had gained up to 3.9 percent in initial reactions, but the gain was ultimately relativized to a maximum of 0.8 percent. They thus fared better than the European sector index Stoxx Europe 600 Chemicals, which fell by 0.3 percent and thus remained at its lowest level since February. Shares in chemicals trader Brenntag fell by 0.6 per cent following the withdrawal of a buy recommendation by Metzler bank.

In 2024, the chemical industry should reach a positive turning point in terms of demand and profits and in 2025 many sector companies should once again show good earnings momentum, wrote analysts Andreas Heine and Isha Sharma from the investment bank Stifel in an industry study. The share prices of Wacker Chemie and Lanxess had the greatest potential for recovery, they said, upgrading both shares to "buy". In addition to a recovery in earnings, both are benefiting from higher values in their non-core areas and an improvement in financial strength.

BASF and Evonik also remain buy recommendations for the Stifel experts. Both stocks followed the subdued sector environment on Friday with share price falls of around 0.4 percent each.

However, the analysts are taking a more cautious view of manufacturers of basic chemicals. The markets are oversupplied with raw chemicals and a recovery in margins with such products will probably take time. However, Stifel does not have a negative vote for any of the sector companies.

The German sector's laggards on Friday were Covestro shares, which lost 1.1 percent, driven once again by takeover fantasies. The Stifel experts wrote that although the plastics group has particularly high profit potential, the timing of a recovery for the Leverkusen-based company is highly uncertain. Covestro has been in talks with Adnoc, a state-owned oil company from the United Arab Emirates, for some time. At the beginning of the week, a report by the Bloomberg news agency stated that there had been renewed movement in these talks.

Brenntag remains at "Hold" in the Stifel study - a vote that has now also been issued by Metzler Bank. The chemicals trader's annual targets seem increasingly ambitious, argued Metzler analyst Alexander Neuberger for his downgrade from "Buy" to "Hold", which he made close to the lowest level since January 2023.

In 2024, Brenntag is one of the worst DAX stocks with a share price loss of almost 22 percent. Wacker and Lanxess are hardly in a better position in the MDax with annual losses of currently 15 and 22 percent respectively./tih/edh/mis