Goldman Sachs has downgraded Clariant AG's stock from Neutral to Sell and set a revised price target of CHF8.00, raised from CHF7.50. The move reflects the bank's assessment that Clariant - despite some appealing valuation metrics - carries greater sensitivity to late-cycle dynamics than many of its more diversified chemical peers.
The analyst note highlights material medium-term pressure in Clariant's Catalyst division. Goldman Sachs pointed to sharp pullbacks in refining and chemicals capital expenditure, ongoing asset shutdowns as chemical companies rationalize operations, and a weak catalyst replacement cycle. Together these trends are weighing on demand and earnings within the division.
On the numbers, Goldman Sachs now expects only 3% EBITDA growth for Clariant through 2027. The bank's forecasts sit roughly 4% below consensus for fiscal 2026 and about 6% below consensus for fiscal 2027, a reflection of both Catalyst division softness and slower growth in Care Chemicals.
At the same time, market signals show mixed signals for investors. Data from InvestingPro indicates the stock is trading under its calculated Fair Value and carries a PEG ratio of 0.67, which can suggest undervaluation relative to projected growth. The company also offers a 4.11% dividend yield and has paid dividends for 14 consecutive years - attributes that may appeal to income-focused investors during a tougher operating cycle.
Despite these positives, Goldman Sachs expressed limited visibility on potential catalysts that could drive a valuation re-rating. The bank cited ongoing litigation uncertainty and difficulty in identifying a clear path to multiple expansion. As a result, it signaled a preference for other sector names, naming Arkema, BASF, Evonik and Syensqo as more attractive alternatives.
Short-term market action has been notable: InvestingPro data shows Clariant returned 14.7% over the past week, while the relative strength index suggests the shares may have moved into overbought territory.
What this means
- Goldman Sachs views Clariant as more exposed to late-cycle weakness than many peers, prompting the downgrade to Sell.
- Persistent headwinds in the Catalyst division and softer Care Chemicals growth underpin below-consensus EBITDA forecasts through 2027.
- Valuation metrics and a multi-year dividend track record provide some support, but litigation uncertainty and lack of clear re-rating triggers limit upside.