JPMorgan Cuts Brenntag to 'Underweight,' Lowers Target Price

Analysts at JPMorgan have downgraded German chemical distributor Brenntag to "Underweight" from "Neutral," citing concerns over the company's exposure to the automotive sector and its high valuation.

The brokerage also lowered its target price on Brenntag shares to €60 from €71, implying a potential downside of around 15% from the current market price.

In a note to clients, JPMorgan analysts said that they were "increasingly cautious" on Brenntag's prospects due to the company's "significant exposure" to the automotive sector, which they believe is facing "significant headwinds" in the coming quarters.

They also noted that Brenntag's valuation is "no longer attractive" compared to other chemical distributors, and that they see "limited upside potential" for the stock in the near term.

The downgrade from JPMorgan comes as Brenntag shares have underperformed the broader market in recent months. The stock has fallen by around 10% since the beginning of the year, while the DAX index has risen by around 5%.

Brenntag is a leading global chemical distributor, with operations in over 70 countries. The company supplies a wide range of chemicals to customers in the automotive, industrial, and consumer goods sectors.

JPMorgan's downgrade is the latest in a series of negative analyst reports on Brenntag. In recent weeks, both UBS and Citigroup have downgraded the stock to "Sell," citing similar concerns over the company's exposure to the automotive sector and its valuation.