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.