Umicore Lowering forecasts and downgrade to Accumulate

We decided to take a more cautious stance on the earnings outlook for Recycling and Energy & Surface Technologies, cutting our group adjusted EBITDA forecasts for the period 2024-2026 by 5-6%. Our new 2024 adj. EBITDA forecast implies a small (-1%) y/y decline, as lower Recycling and Catalysis results are no longer expected to be offset by earnings growth of the RBM business. Despite the earnings downgrade, we continue to believe Umicore is well placed to play an important role in the electrification of transportation as we believe that global OEMs are still determined to establish local supply chains in Europe and North America. High manganese and solid-state technologies will in our opinion support the position of NMC-chemistries outside of China in the coming decade. Whilst RBM is the major growth driver for Umicore in the remainder of this decade, battery recycling has the potential to become a major growth driver into the next decade. Acknowledging the absence of EBITDA growth in 2024E, we decided to lower our rating from Buy to Accumulate, with TP lowered from € 35 to € 29.