Umicore Model update following recent guidance upgrade, target price upped
The recent FY25 guidance upgrade prompts us to increase our FY25E adjusted EBITDA forecast by 12% whilst we also decided to increase our forecasts for the years 2026-2028 by c. 10-12%, reflecting oa the progress with efficiency improvement measures and advantageous metal prices, which we believe Umicore will probably partly lock-in for a longer period of time. Umicore is a combination of different tales, with the foundation businesses (Catalysis, Recycling, Specialty Materials) mainly run for their cash generation potential whilst Battery Materials remains a potential growth driver, although Umicore does not intend to spend much additional capex alone beyond finishing earlier started expansion investments. Partnership agreements might be a next share price catalyst and together with a still attractive valuation prompt us to maintain our Accumulate, with our target price upped from € 12 to € 16.Umicore is global player in the materials technology and recycling industries. Co. focuses on application areas such as chemistry, materials science, metallurgy and recycling. Co.'s business model comprises four segments: Catalysis, Performance Materials, Energy Materials and Recycling. Catalysis focuses on the abatement of global automotive emissions; Performance Materials focuses on materials that help develop more sophisticated and safer products; Energy Materials produces materials used in the production and storage of clean energy including rechargeable batteries and photovoltaics; and Recycling treats complex waste streams containing precious and other non-ferrous metals.
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