Arkema Earnings: Continued Weak Demand but EBITDA Slightly Above Consensus Driven by Cost Savings

No-moat Arkema reported third-quarter EBITDA of EUR 386 million, down 22% from its 2022 high comparison base but still 2.4% above the company-compiled consensus. The results were mainly impacted by lower prices across all segments and lower volumes in Europe and United States in most end markets. However, margins were resilient at 16.6% versus 16.7% in the third quarter of 2022, benefiting from cost-control initiatives. Despite this, the quarter continued weak demand, guidance for 2023 EBITDA of EUR 1.5 billion was maintained supported by cost-saving actions and management’s expectation of good momentum for the fourth quarter. We maintain our EUR 105 fair value estimate. Shares are up around 4% intraday at the time of writing. At current levels, the shares look undervalued.