Covestro's EBITDA Down Nearly 70% in 4Q; Shares Fairly Valued
No-moat Covestro reported fourth-quarter EBITDA of EUR 293 million, down 67% from the prior-year period. Polyurethanes profits collapsed because of unsustainable prices, as we have argued for several quarters. While EBITDA missed consensus and our estimate, the expected deterioration in performance is now largely priced in, given that the shares were down a paltry 3%-4% intraday despite EBITDA falling off a cliff. The shares are also now trading in line with our EUR 47 fair value estimate, which...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.
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