(AOF) – On Sika, Credit Suisse maintains its Buy recommendation with an Out-Performance opinion, while lowering its target price from 384 to 367 Swiss francs. This lowering of the target is justified by the broker because of a higher weighted average cost of capital (WACC). “We are using 7.6% vs. 7.3% in our DCF (free cash flow method) model to account for recent interest rate hikes and a target enterprise value multiple on Ebitda forecast for fiscal year 2023 slightly lower (21x vs. 22x),” he explains.
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CSR permeates the sector
Unicem created a CSR label in 2018, which met with some success: in concrete, nearly 700 sites, i.e. half of the activity in France, have committed to the approach, as well as 400 sites constituting almost 30% of the turnover of French quarries. This approach encompasses several initiatives such as reducing the carbon footprint of products or improving relations with suppliers. Great efforts have been made in terms of recycling, which now reaches 70% in the sector, compared to regarding 50% ten years ago, and while it was almost non-existent thirty years ago. However, Unicem would like the public authorities to strengthen their support for this CSR approach through the use of labeled companies.
A second part of the year at risk
Chemical players should be faced with a scissors effect. First, they have to face an explosion of costs: experts estimate that in 2022 natural gas prices should increase by 470% and electricity prices by around 300% following the war in Ukraine. Added to this is an oil price that is also on the rise. On the other hand, their ability to increase prices should be penalized by a less dynamic economic context, linked in particular to the difficulties on the Chinese market, weighed down by a wave of confinements. The world leader, BASF, anticipates a decline of between 6% and 14% in its profits in 2022.
