Berenberg Lifts Covestro Price Target After Adnoc's XRG Completes Acquisition

02:44 AM EST, 12/15/2025 (MT Newswires) -- Covestro's (1COV.F) price target was raised to 62 euros from 61 euros, with an unchanged hold rating, following the finalized acquisition of the German chemicals producer by XRG, the energy investment subsidiary of Abu Dhabi National Oil, d/b/a Adnoc. "We expect that ADNOC will eventually squeeze out the remaining shares not tendered for a price equal to the EUR62/share offer price. In light of this, we have updated our price target and modelled the EUR1.17bn capital increase agreed on the closing of the deal," according to a Dec. 12 note. While Covestro is expected to benefit from reduced natural gas costs and the resolution of the force majeure at the Dormagen site in Germany, chemicals overcapacity remains a headwind, and the short- to mid-term outlook for the European chemicals sector is "not promising," the research firm said. Analysts believe a "sustainable" European recovery hinges on China resolving overcapacity issues, which Berenberg doubts, given planned ethylene MDI capacity additions in the coming year. However, the note mentioned awaiting clarity from the country's upcoming five-year plan, scheduled to be announced in March 2026. Berenberg reduced its earnings estimates, including EPS, sales, and EBIT assumptions for full-year 2026 and beyond, amid lower anticipated margins for polycarbonates and specialty coatings products.