Summary: Goldman Sachs has downgraded Akzo Nobel NV to Neutral from Buy and reduced its 12-month price target to €54 from €71. The brokerage revised down adjusted EBITDA and EPS estimates for FY26 through FY28 after factoring in a marked rise in input costs and ongoing demand pressure across key end markets. The note highlights a concentrated, oil-linked raw material exposure, a three-month inventory position that limits absorption of cost shocks, and sector-specific margin deterioration.
Earnings and forecast revisions
Goldman Sachs trimmed its adjusted EBITDA forecast for FY26 by 8.4% to €1.33 billion, placing the broker’s estimate approximately 10% below consensus and below Akzo Nobel’s own guidance of more than €1.47 billion. For FY27 and FY28 the brokerage lowered adj. EBITDA to €1.48 billion in each year, which sits 13% and 15% below consensus, respectively.
EPS estimates were cut materially as well: FY26 EPS was reduced 16.7% to €3.18 from €3.82, FY27 was lowered 19.4% to €3.58, and FY28 by 14.9% to €3.69. While revenue for FY26 was nudged up slightly to €9.87 billion from €9.68 billion, the adjusted EBITDA margin was revised down to 13.4% from 15.0%, reflecting a 153 basis-point compression.
Input cost shock and inventory dynamics
Goldman Sachs assumes about half of Akzo Nobel’s raw-material exposure is oil-linked and concentrated across Asia and EMEA. Under that assumption, a 20% rise in input costs would equate to an annualised headwind of roughly €300 million. Given Akzo Nobel’s roughly three months of inventory, the broker expects the bulk of the impact to materialise in the second half of 2026, producing an EBITDA drag of about €150-200 million for the year.
The brokerage’s proprietary Paints & Coatings Raw Material Basket increased 19% month-on-month in March, with titanium dioxide and petrochemical-linked inputs identified as particular pressure points that could persist through FY27 and FY28.
Segment-level impacts
Decorative Paints absorbed the largest margin adjustments. Goldman Sachs cut FY26 adjusted EBITDA for Decorative Paints by 11.7% to €589 million and reduced the FY27 figure by 18.0% to €591 million. Performance Coatings saw a smaller downgrade, with FY26 adj. EBITDA revised down 5.2% to €801 million.
Supply risk and regional considerations
The note also highlighted a Middle East supply risk emerging in the second half of the year. Goldman Sachs pointed out that Akzo Nobel had not pre-built inventory in anticipation of potential disruptions. That, together with the company’s three-month inventory position, leaves less buffer against both supply interruptions and rapid cost inflation according to the brokerage.
Valuation and market reaction
Goldman Sachs’ fundamental valuation for Akzo Nobel fell to €47 per share from €61. This valuation uses a 13.6x 2026/2027E EV/DACF multiple and is blended at 85% with an M&A-based valuation of €95 per share. The M&A-derived figure is calculated using a 15x 2026E EV/EBITDA multiple based on precedent transactions. The brokerage’s published 12-month price target after the downgrade is €54.
Since being added to Goldman Sachs’ Buy list on March 6, 2025, Akzo Nobel’s shares have declined about 20%, compared with an approximate 4% rise in the FTSE Europe index over the same period. At the time of the brokerage note, the stock traded at €49.20, which implies roughly 9.8% upside to the revised €54 target.
Near-term catalysts
Akzo Nobel is due to release first-quarter 2026 results on April 23, a report that may provide more clarity on demand trends, margin trajectory, and any near-term inventory or supply-chain decisions. Goldman Sachs’ downgrade and the accompanying model adjustments underscore which variables the brokerage will be watching in that release: raw-material trends, margin development across Decorative Paints and Performance Coatings, and whether management takes additional pricing or operational actions to counteract cost inflation.
Conclusion
Goldman Sachs’ reassessment of Akzo Nobel reflects a combination of rising input costs, limited inventory cushioning, and sustained volume pressure in end markets. The broker’s cuts to EBITDA and EPS across FY26-FY28 and a lower blended valuation have resulted in a Neutral rating and a much reduced 12-month target. Near-term risk factors highlighted by the note center on the trajectory of raw-material prices and potential supply disruptions in key regions.