Solvay - Resilience and returns are increasingly recognized
• Despite the share price rally over the past few weeks, we see room for more upside, as we are likely at the brink of a cyclical upturn and its multiples remain undemanding (double digit FCF yield, 8% dividend yield). • We reiterate our Buy and raise our TP by 16% to EUR 36 based on an increased target EV/EBITDA of 6.2x 2025E (was 5.7x) on the back of higher peer group multiples and backed by our DCF.Solvay is engaged in chemical and plastic businesses worldwide. Co. offers chemical products such as advanced materials, barium strontium, calcium chloride, caustic soda, chlorinated products, fluor, peroxygen products, polyglycerols, precipitated calcium carbonate, soda ash, and sodium bicarbonate. It also provides specialty polymers, such as Spire ultra polymers, Solviva biomaterials, and sulfone polymers. Co. structures its activities around five operating segments: Advanced Formulations, Advanced Materials, Performance Chemicals, Functional Polymers and Corporate & Business Services, each with its own specific business model and each comprised of Global Business Units (GBUs).
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