Lanxess Stock: Shares Tumble on Cautious Outlook

Lanxess shares dropped significantly on Thursday, falling approximately 5 percent to €29.25 after the specialty chemicals company issued a conservative forecast for the current fiscal year. Despite reporting solid progress in early 2024 and improvements in operating profit, investors responded negatively to the company's restrained outlook. The Cologne-based MDAX-listed firm projects an adjusted operating profit (EBITDA) between €600-650 million for the full year, potentially indicating minimal growth at the lower end of the range and falling short of analysts' average expectation of €675 million. The first quarter forecast particularly disappointed market observers, with Lanxess anticipating only a 25-35 percent increase in adjusted EBITDA compared to the previous year's €101 million-considerably weaker than what would be required to achieve annual targets. While sales volumes increased across most business segments, revenue declined by about 5 percent to nearly €6.4 billion due to reduced selling prices, resulting in a net loss of €177 million for 2023.

Cost-Cutting Program Exceeds Targets

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Sollten Anleger sofort verkaufen? Oder lohnt sich doch der Einstieg bei Lanxess?

One positive development emerged from the company's cost-cutting initiative. The program, introduced in summer 2023, aims to permanently reduce annual expenses by approximately €150 million by 2025. Lanxess has already achieved €110 million in savings during the past year-20 percent more than initially planned. The dividend remains stable at 10 cents per share despite financial challenges. The current market decline follows a remarkable rally where Lanxess stock had surged more than 50 percent from its mid-January low to an early March high, significantly outperforming both the MDAX index and the broader European chemical sector. However, persistent weak demand across the chemical industry and limited signs of recovery continue to create uncertainty for investors.