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Syensqo SA SYENS

Morningstar Rating
€96.23 +0.37 (0.39%)
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Company Report

Syensqo Earnings: EBITDA Broadly in Line With Expectations; Shares Undervalued

Narrow-moat Syensqo reported first-quarter 2024 underlying EBITDA of EUR 363 million, 23% lower than the prior year, but slightly ahead of EUR 349 million company-compiled consensus. Net sales were down 8% on a like-for-like basis, primarily driven by the expected lower pricing in the consumer and resources and specialty polymers businesses. Still, the first-quarter EBITDA margin of 22.3% represents a sequential improvement compared with the 18.7% reported in fourth-quarter 2023, attributed to an improvement in gross margin and stronger volume momentum. Given this sequential improvement—which is expected to continue in the second quarter—management confirmed full-year guidance, calling for 2024 underlying EBITDA in the range of EUR 1.4 billion-EUR 1.55 billion. This is aligned with our forecast and we therefore confirm our EUR 115 fair value estimate. Shares are undervalued at current levels.

Price vs Fair Value

SYENS is trading at a 667% premium.
Price
€95.86
Fair Value
€992.00
Uncertainty
Medium
1-Star Price
€599.52
5-Star Price
€11.90
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Syensqo's composite materials segment should benefit from light-weighting trends in aerospace, increased air traffic, and budgets for defense programs.

Bears

Syensqo's business activities in the materials segment are capital-intensive, which means lower demand and lower utilization rates during a cyclical downturn could weigh on returns.

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Trading Information

Previous Close Price
€95.86
Day Range
€95.5697.47
52-Week Range
€77.27109.90
Bid/Ask
€95.25 / €97.00
Market Cap
€10.19 Bil
Volume/Avg
71,815 / 161,664

Key Statistics

Price/Earnings (Normalized)
Price/Sales
1.27
Dividend Yield (Trailing)
Dividend Yield (Forward)
1.69%
Total Yield

Company Profile

Syensqo is a spinoff of Solvay, a Belgium-based producer of essential and specialty chemicals, founded in 1863. The demerger was undertaken in 2022 and encompasses Solvay’s specialty chemicals and materials business units. Syensqo is a leading manufacturer of high-performance materials and specialty surfactants that operates through two main segments. The materials segment (60% of sales) includes specialty polymers and composite materials mainly for applications in autos, aerospace, and electronics. Consumer and resources (40% of sales) include Novecare, technology solutions, aroma performance, and oil and gas, and serves consumer goods end markets. Geographical exposure is well balanced with North America and the Asia-Pacific each contributing around 40% of sales and the rest from Europe.
Sector
Basic Materials
Industry
Chemicals
Stock Style Box
Mid Growth
Total Number of Employees

Competitors

Valuation

Metric
SYENS
HXL
AKE
Price/Earnings (Normalized)
41.1316.26
Price/Book Value
3.661.10
Price/Sales
1.273.400.78
Price/Cash Flow
6.6321.906.71
Price/Earnings
SYENS
HXL
AKE

Financial Strength

Metric
SYENS
HXL
AKE
Quick Ratio
0.741.541.44
Current Ratio
1.042.741.90
Interest Coverage
4.844.23545.00
Quick Ratio
SYENS
HXL
AKE

Profitability

Metric
SYENS
HXL
AKE
Return on Assets (Normalized)
7.38%5.18%4.45%
Return on Equity (Normalized)
17.78%9.01%9.58%
Return on Invested Capital (Normalized)
10.08%7.39%5.55%
Return on Assets
SYENS
HXL
AKE
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