FRANKFURT (dpa-AFX) - An optimistic study by Citigroup boosted the recovery of Evonik shares on Tuesday. The major US bank gave Evonik "positive catalyst watch" status and expects positive news in the short term. The target price rose by one euro to 25 euros and the "buy" investment rating was reiterated. In view of the specialty chemicals company's strong business momentum, the share is "clearly too cheap", wrote Citi analyst Sebastian Satz.

The shares of the specialty chemicals company, which had only fallen to their lowest level since the end of March on Friday, rose by 1.6 percent to 18.82 euros later in the morning. The share price had already risen by 1.5 percent the previous day, closing above the exponential 200-day line, which is an important indicator for the longer-term trend of a share.

Looking at the year to date, Evonik shares have gained 1.6 percent, while the MDax has lost around 5.5 percent and the European chemical sector index around 3 percent.

Citi analyst Satz expects Evonik's strong earnings momentum to continue. Due to the brighter mood in the German chemical industry, the chance for a strong development of the operating result (EBITDA) in the second quarter has increased.

The Specialty Additives Division is the main driver for its forecast for earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter, which is four percent above the average analyst estimate. He expects Evonik to raise its outlook for 2024 when it presents its figures.

The analyst also sees several factors that should drive earnings growth beyond this. Satz mentions cost measures in the animal feed protein methionine business, the expansion of production with a new plant for biosurfactants, for example, and the Group-wide restructuring program, which is expected to bring cost savings of around €400 million by 2026. "The extensive nature of the initiatives should lead to some positive net profit contributions over the next two years," wrote the Citigroup expert.

Meanwhile, Satz has become somewhat more cautious with regard to methionine and the possible price development in 2025. However, falling energy costs should more than compensate for this. According to him, some investors are not yet fully aware of this./ck/mis/jha/

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