Shares of Solvay SA ticked higher by more than 2% on Thursday following an adjustment to the brokerage view from Deutsche Bank. The bank upgraded the Belgian chemicals maker to Hold from Sell and lifted its price target to €26 from €23.50, citing rare-earths exposure as a key factor behind the change in stance despite persistent business challenges.
Deutsche Bank analyst Tristan Lamotte noted the stock’s movement since the prior downgrade and referenced the SX4P index’s performance, observing that the index had risen 10% over the same period. Lamotte also reiterated the group’s current share price comparison to the level at which the earlier downgrade occurred, saying: "Solvay’s share price is now €25.8/share (versus €27.8/share when we downgraded the stock on 24 November 2025, SX4P +10% over the same period)."
The bank pointed to valuation metrics, saying Solvay trades at about 7.5 times 2026 estimated EV/EBITDA, which represents a premium relative to peers. Deutsche Bank indicated that this premium can be rationalised by the company’s rare-earths prospects.
On the potential earnings contribution from rare-earths, the bank put a tangible figure on the opportunity. It estimated rare-earths could add as much as 13% to earnings before interest, taxes, depreciation and amortisation, which it quantified initially as approximately €100 million of EBITDA. Deutsche Bank framed this as being underpinned by what it described as significant non-China supply and demand growth in the rare-earths segment, and noted that a favourable outcome from a rare-earth project could provide additional upside to the share price.
However, the upgrade did not amount to an unequivocal bullish endorsement. Deutsche Bank retained a guarded view of Solvay’s core operations and flagged several areas of pressure: the possibility of downgraded guidance, ongoing challenges in soda ash markets, soft demand from construction-related end-markets and constrained free cash flow.
Analysis
The adjustment by Deutsche Bank highlights a balancing act between structural opportunity in speciality materials and short-term cyclical pressures in traditional chemical segments. The rare-earths angle provides a strategic narrative that could justify a premium valuation, but it has not erased near-term operational risks that could weigh on cash generation.