Goldman Sachs upgraded Arkema, Evonik, and Symrise to "buy" while raising Lanxess to "neutral," part of seven rating changes as the brokerage shifts to a pro-cyclical view on European chemicals. Downgrades to neutral or sell were issued for Umicore, Givaudan, and Clariant. The move cites early stabilization in industrial metrics like U.S. manufacturing PMI and chemical rail shipments.

This revision follows 17 million tonnes of European capacity closures in 2025, accelerating a trend that has removed about 9% of regional capacity since 2022. Broader indicators, including rising German infrastructure spending and China's policy easing, support the turn. Goldman sees trough margins in fiscal 2025 and expects diversified chemical firms to lead earnings revisions.

The brokerage now projects average 13% upside to its 12-month price targets, with diversified chemicals showing 18% potential. Despite lingering overcapacity and Chinese export pressures, valuations for several names sit near two-decade lows on an EV-to-EBITDA basis. The changes reflect a belief that the sector's risk-reward profile has improved after a prolonged downturn.