Strong fourth quarter for Covestro with stable outlook for 2017; shares overvalued.
After reviewing Covestro’s fourth-quarter results, we are maintaining our no-moat rating but expect to increase our fair value estimate by a mid-single-digit percentage due to our expectations for a tighter polyurethane market in 2017 and the time value of money. However, we are maintaining our long-term view for a looser polyurethane market in 2018 and beyond. We think the market’s demand expectations for China are too optimistic, given that demand in construction-related markets should decline...Covestro AG is a global supplier of high-tech polymer materials and application solutions developed for these materials. Co. produces precursors for polyurethane foams and the high-performance plastic polycarbonate in addition to raw materials for coatings, adhesives and sealants as well as specialty products, including high-quality films. Other precursors such as chlorine and by-products like styrene are part of Co.'s range of products.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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