Learn about the recent stock rating shift for Covestro AG (1COV: GR) (OTC: COVTY) as Citi downgrades the company from Buy to Neutral following an investment agreement with ADNOC.
Covestro recently agreed to a takeover by ADNOC at a price of €62.00 per share, lower than Citi's estimated value of over €90.00 per share. Despite the downgrade, Citi slightly adjusted the price target for Covestro to €62.00 from €61.00, noting no unexpected surprises in the agreement.
Citi's analysis indicates that the offer price is equivalent to approximately 6 times Covestro's historical EBITDA, suggesting that most shareholders may accept ADNOC's offer. The deal is expected to close in the second half of 2025 with no regulatory obstacles foreseen by Citi.
Analysis and Breakdown:
The recent downgrade of Covestro's stock by Citi from Buy to Neutral comes after an investment agreement with ADNOC for a takeover at €62.00 per share. This offer is lower than Citi's estimated value, but the financial institution believes that shareholders are likely to accept it. The deal is expected to close in the second half of 2025 without any regulatory hurdles. Despite the downgrade, Covestro's stock has shown strength in the market, with a positive return over the past week and year. Analysts predict profitability for the company this year, influencing shareholders' decisions. Investors can find more detailed analysis and tips on Covestro's financial health and market position through InvestingPro.