EVK: Margin Resilience And Efficiency Measures Will Drive Future Upside Potential

The analyst price target for Evonik Industries has been revised modestly lower, from approximately EUR 16.14 to EUR 15.68. Analysts are factoring in softer revenue growth, slightly lower profit margins, and a more cautious sector stance, despite some institutions maintaining positive ratings.

Analyst Commentary

Recent Street research on Evonik Industries reflects a more balanced, selectively constructive stance, with price targets drifting lower but opinions divided on the company’s medium term upside potential.

Bullish Takeaways

• Bullish analysts continue to see upside from current levels, as several price targets still sit comfortably above the revised consensus. This supports a view that the market is already discounting much of the cyclical weakness.
• Some expect execution on efficiency and portfolio measures to support margin resilience. They argue that cost discipline and asset optimization can offset part of the softer demand environment.
• JPMorgan’s Overweight rating, even after trimming its target, signals confidence that Evonik can outperform peers if industrial demand normalizes and the company delivers on self help initiatives.
• The presence of Buy ratings, despite downward target revisions, suggests that long term growth in specialty segments and potential for improved capital allocation remain underappreciated in the share price.

Bearish Takeaways

• Bearish analysts are cutting price targets to reflect cyclical and structural headwinds in European chemicals, which they see limiting top line growth and putting further pressure on profitability.
• Downgrades to more neutral stances highlight concerns that earnings estimates are still at risk, with slower volume recovery and weaker pricing power challenging near term valuation support.
• A shift in preference toward industrial gases, ingredients, and distributors underscores skepticism that diversified chemicals like Evonik can command premium multiples versus more focused peers.
• Lower targets around the mid teens indicate a view that operational improvements may only partially offset macro and sector pressures. As a result, the risk reward profile appears more balanced than compelling in the short run.

What's in the News

• Issued new earnings guidance for the third quarter of 2025, projecting revenue of about €3.4 billion versus €3.8 billion in the third quarter of 2024, which signals expectations for a softer top line in the near term (company guidance)

Valuation Changes

• Fair Value: reduced slightly from approximately €16.14 to €15.68 per share, implying a modestly lower intrinsic valuation.
• Discount Rate: increased marginally from around 6.38 percent to 6.39 percent, reflecting a slightly higher required return.
• Revenue Growth: eased from about 1.47 percent to 1.45 percent, indicating a slightly more cautious outlook on top line expansion.
• Net Profit Margin: lowered modestly from roughly 4.28 percent to 4.23 percent, pointing to a small downward adjustment in expected profitability.
• Future P/E: edged down from about 13.55x to 13.34x, suggesting a slightly less optimistic multiple on forward earnings.