Barclays flags top 2 ideas for European Chemicals and Ingredients sector in Q2 Investing.com -- Barclays has flagged Evonik Industries (ETR:EVKn) and Arkema (EPA:AKE) as its top stock ideas heading into the second-quarter earnings season for European Chemicals & Ingredients, naming the former as a top positive call and the latter as the most vulnerable. Evonik stands out as Barclays’ highest conviction Overweight idea. The bank notes that while the stock has de-rated by 9% over the past month—more than peers—earnings expectations remain resilient. “Evonik is the only company among the group for which annualised Q2 EBITDA still falls within the current FY25 guidance range,” the analysts led by Katie Richards said. Supportive pricing in methionine and solid forward contract visibility have underpinned this view, with management confirming that 90% of Q3 contracts are already booked. Barclays’ full-year 2025 (FY25) EBITDA estimate of €2.067 billion aligns with Bloomberg consensus and falls within the company’s guidance range of €2–2.3 billion. In contrast, Barclays downgraded Arkema to Equal Weight from Overweight and slashed the price target to €80 from €107. The firm warns that Arkema “has the potential to issue the largest FY25 guidance cut of the names we cover at Q2,” citing exposure to North America and construction markets, both pressured by tariff uncertainty and subdued demand. Moreover, weak acrylic margins, disruptions in hydrogen peroxide production, and losses tied to Dow’s laminates business are likely to pressure Arkema’s segment profitability. Despite growing awareness among investors, the bank believes these risks are not yet fully reflected in the stock’s valuation. Barclays’ FY25 EBITDA forecast of €1.368 billion is now 7% below the low end of Arkema’s guided range. Speaking more broadly, Barclays analysts believe the sector as a whole faces “broad-based downside risk to FY25 guidance,” with hand-to-mouth ordering and limited customer visibility continuing to weigh on sentiment. While most companies are relying on a second-half recovery, the bank sees signs that guidance may soon be revised to reflect more grounded expectations. Don't miss out on the next big opportunity! Stay ahead of the curve with ProPicks AI – 6 model portfolios fueled by AI stock picks with a stellar performance this year... In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record. With portfolios tailored for Dow stocks, S&P stocks, Tech Stocks, and Mid Cap stocks, you can explore various wealth-building strategies. So if AKE is on your watchlist, it could be very wise to know whether or not it made the ProPicks AI lists.

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European Chemicals sector outlook for 2025 and 2026: UBS Investing.com -- European chemicals are unlikely to see a strong recovery in volumes through 2025 and 2026, according to UBS, which maintains a cautious stance on the sector amid sluggish macro indicators and lingering tariff uncertainty. UBS expects only modest gains in volume growth, with its analysts forecasting 2.6% year-on-year volume growth in 2025 and 3.2% in 2026 across the sector. The outlook is skewed in favor of Consumer Chemicals and Industrial Gases, with other sub-sectors trailing. “We believe that a defensive stance is the correct approach for the next 12 months in the European Chemical sector,” UBS analysts led by Geoff Haire said, citing muted momentum in cyclical end-markets and limited upside from low capacity utilization. The bank forecasts EBITDA growth of 4% in 2025, in line with consensus, but sees only 7% growth in 2026, well below the market’s 10% expectations. “In our opinion, without an improvement in volumes and/or prices in 2H25 we believe that double-digit EBITDA growth appears ambitious,” the analysts wrote. Within sub-sectors, UBS sees a notable divergence, expecting just 1% EBITDA growth in Specialties and 7% in Diversifieds for 2026, compared to consensus estimates of 9% and 15%, respectively. Defensive sub-sectors Consumer Chemicals and Industrial Gases are UBS’s preferred areas, with Buy ratings on names such as DSM Firmenich AG (AS:DSFIR), Air Liquide SA (EPA:AIRP), and Arkema (EPA:AKE). The analysts note that Consumer names offer relatively better volume and earnings visibility, and that “the Consumer Chemical companies offer high-single-digit EBITDA growth with mid-single-digit volume growth.” By contrast, UBS downgraded Akzo Nobel NV (AS:AKZO) to Neutral, stating that the upside from cost savings and divestitures appears largely priced in. “While the company can deliver high-single-digit EBITDA growth in 2025 and 2026 on the back of cost savings, we expect this to fall to mid-single-digit EBITDA growth beyond 2026,” the analysts said. They also cut their price target on Akzo Nobel shares to €64 from €70. Among least-favored names are K+S AG (ETR:SDFGn), Umicore (EBR:UMI), and Victrex (LON:VCTX), where UBS flagged structural or end-market headwinds. The report also highlights macroeconomic drag from U.S. and Chinese slowdowns, with UBS forecasting 2025 and 2026 global GDP growth to be 60 bps below 2024 GDP, primarily driven by the impact of tariffs. Inventory levels remain elevated across key end-markets such as healthcare and construction, further reducing the likelihood of a sharp volume rebound in the near term. With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Sure, there are always opportunities in the stock market – but finding them feels more difficult now than a year ago. Unsure where to invest next? One of the best ways to discover new high-potential opportunities is to look at the top performing portfolios this year. ProPicks AI offers 6 model portfolios from Investing.com which identify the best stocks for investors to buy right now. For example, ProPicks AI found 9 overlooked stocks that jumped over 25% this year alone. The new stocks that made the monthly cut could yield enormous returns in the coming years. Is AIRP one of them?

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