Lanxess Pricing Windfall and Balance Sheet Risk

Goldman Sachs downgrades Lanxess AG to Sell, lowering the price target to €13 due to persistent balance sheet risks and the erosion of a potential pricing windfall following the Middle East conflict.

Key Takeaways

• 1.Downgrade to Sell from Neutral with a price target reduction to €13 from €21.
• 2.High leverage (4.2x Net Debt/EBITDA) and lack of free cash flow generation act as significant structural constraints.
• 3.The pricing power of Lanxess is questioned as higher feedstock and energy costs offset the benefit of price increases.

Table of Contents

• Lanxess portfolio less well positioned for upstream market share gains
• Pricing windfall in question
• New GSe 2H26 exit rate takes us notably below consensus for 2027/28
• Weak cash generation and leverage to weigh on valuation
• Weaker returns profile justifies a discount
• Valuation and Risks
• Disclosure Appendix
• Price target and rating history chart(s)

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