J.P. Morgan on Wednesday reaffirmed its underweight stance on Wacker Chemie (ETR:WCHG) but raised the firm's December 2027 price target to €60 from €50. The updated target sits well below the stock's most recent close of €95.30, implying an approximate 37% downside from that level.
The brokerage placed Wacker on Negative Catalyst Watch in the run-up to the company's second-quarter results, which are scheduled for July 30. At 06:12 ET (10:12 GMT) shares were reported down 3.2%.
The higher price objective reflects a recalculation of the market capitalisation for Siltronic, in which Wacker holds a 31% stake. Using a sum-of-the-parts approach, J.P. Morgan values Wacker's Siltronic holding at €757 million. On that basis, the revised target equates to an implied valuation of roughly 0.7 times price to tangible book value.
J.P. Morgan's note highlighted a pronounced jump in Chinese silicone exports. The broker reported that Chinese net exports rose 69% year-on-year in the first quarter of 2026, with March showing an increase of 110% compared with the prior year. Both figures were described as record levels. The firm attributed the surge in shipments to demand being pulled forward ahead of the removal of China’s 13% export tax rebate on April 1.
In the quarter, Chinese net exports represented 25% of global silicone demand and 19% of European demand, versus averages of 14% and 11% respectively over the previous four years, according to J.P. Morgan's figures.
Against this backdrop, J.P. Morgan increased its forecast for Wacker's 2026 adjusted EBITDA by 4% to €598 million. Even with that upward revision, the estimate remains 6% below Bloomberg consensus. The broker expects 2026 adjusted EBIT of €110 million, which it says is 26% below consensus.
Estimates for 2027 adjusted EBITDA were left largely unchanged at €643 million, a level J.P. Morgan notes is 13% below consensus, while 2028 EBITDA was trimmed by 4.5% to €704 million, 15% below consensus.
For the second quarter of 2026 specifically, J.P. Morgan projects EBITDA of €156 million, which it describes as 7% below consensus, and EBIT of €33 million, 35% below consensus. The bank's adjusted earnings-per-share outlook shows a loss of €0.35 in 2026, improving to €0.87 in 2027 and €2.36 in 2028.
Valuation metrics cited in the note show the stock trading at 1.5 times price to tangible book value. J.P. Morgan's forecasts imply projected returns on tangible equity of -0.5% in 2026, 1% in 2027 and 3% in 2028. On an enterprise value basis, Wacker is trading at 9.2 times estimated 2026 EBITDA and 8.2 times 2027 EBITDA - levels the bank says are above the company's five-year median of 6.4 times and 10-year median of 7.2 times.
Context and near-term focus
J.P. Morgan's action combines an upward adjustment to a long-term price target with a continued cautious stance, and it explicitly flags a near-term earnings announcement as a potential catalyst to watch. The firm’s forecasts and valuation comparisons suggest it views current market pricing as generous relative to its expectations for profitability and returns over the next several years.