Monthly Thematic Piece

Revising Our Company Views – Relatively
May 20, 2020
Products Mentioned:
Fertilizer, Gasoline, Industrial Gases, Paint, Corn/Ethanol, Ethylene, Polyethylene, Polypropylene
Companies Mentioned:
Albemarle, Air Products, Sherwin Williams, Ecolab, Covestro, Olin, Mosaic, Huntsman, FMC, DuPont, PPG, Westlake, LyondellBasell, Dow, Linde, Celanese, Eastman, IFF
Subjects Covered:
Earnings Revisions, Stock Performance, Valuation

C-MACC Perspectives No 16 – Stocks

Revising Our Company Views – Relatively

  • The revision story may not be fully played out for some chemical companies and performance has been uneven, suggesting that a few stocks are oversold while others likely have downside.
  • Some of the “safety stocks” look too safe in terms of earnings revisions and in terms of performance and suggest a greater economic bounce back than is likely – greatest risk Albemarle, Air Products, Sherwin Williams, Ecolab.
  • Olin, Covestro and Mosaic have had some dramatic revisions – Mosaic looks oversold but Olin maybe not enough.
  • A look at 2H2020 and 1H2021 does not materially change the conclusions but reinforces how positive expectations are for stocks with a durable bias, which we find concerning, given our more conservative views on the rate of recovery.

See PDF Below for all charts referenced

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