Sunday Thematic & Weekly Recap

Take The Money And Run: This Should Be A No-Brainer For Covestro
June 25, 2023
Commodities Mentioned:
Plastics, PVC, Polyethylene, Polypropylene, PU, PC, PET, Critical Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha, Ammonia, Methanol, Silicon, Recycled Plastic, Biofuels, Ethanol
Companies Mentioned:
Shell, Dow, LyondellBasell, ExxonMobil, Nova Chemicals, Chevron Phillips Chemical, PPG, Akzo Nobel, Sherwin-Williams, Celanese, Kuraray, Nutrien, CF Industries, LSB Industries, BASF, Corteva, Bayer, FMC, Olin, Lanxess, Adnoc, Covestro, OMV, Huntsman, SABIC, LG Chem, Brenntag, Solvay, Umicore, Zhejiang Petroleum, Satellite Chemical, Idemitsu Kosan, Rio Tinto, Lynas, Röhm, FedEx, Petrobras, Petronas Chemicals, Cabot Corporation, Polystyvert, Ascension Clean Energy, Mitsui O.S.K, nVent, Rolls-Royce, 3M, Tesla, QatarEnergy, Pertamina, BP, Chandra Asri, TotalEnergies, Air Products, Aramco, Air Liquide, Bloom Energy, Chart Industries, Aker Carbon Capture, Borealis, Formosa Plastics, Chevron, ICL, Ascend Performance Materials, Maersk, European Lithium, Richmond Minerals, Piedmont Lithium, Sasol, Topsoe, Altius Renewable Royalties, Enerpac Tool Group, Glencore, KB Home, Cheniere, Equinor, Koch Fertilizer, Albemarle, SQM, Tianqi, Livent, Freeport McMoRan, BHP, Vale, Ganfeng Lithium, Braskem, Verde Bioresins, Vinmar, SASA Polyester, Thyssenkrupp Uhde, Johnson Matthey, Ashland, Mitsui, Teknor Apex, Grupa Azoty, PKN Orlen, Bosch, Apogee Enterprises, ADM, Altus Power, Alcoa, Avangrid, Hyfé, Farmer Business Network, Tigo Energy, CarMax, Mitsubishi Chemical, Trafigura

C-MACC Sunday Thematic & Weekly Recap 174

Take The Money And Run: This Should Be A No-Brainer For Covestro

  • History shows that not accepting a cash offer in the early stages of an industry downcycle is generally something you regret.  Covestro should take the deal.
  • The risk of trying to be too cute on price here is that industry fundamentals deteriorate, the Lanxess earnings warning is not isolated, and valuations fall.
  • There have been examples of companies that pushed for higher take-out prices only to have buyers walk away and return later at much lower prices.  
  • As we watch the data roll in – macro and industry-specific – we struggle to see anything but weakness for the broad chemical space for 2023 – M&A is inevitable  
  • Otherwise, more evidence of chemical feedstock surpluses, more signs that crops could be short (buy ag chemicals), and we do a deep dive on blue hydrogen

Last week we discussed 20 Chemicals and Related Products and 106 Companies.

See PDF below for all charts, tables and diagrams

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