Berenberg has reaffirmed its Buy rating and a price target of EUR46.00 on Fuchs Petrolub SE (FPE3:GR) (OTC: FUPBY), a global lubricants manufacturer. The endorsement comes despite recent disappointing earnings reports from major automotive companies such as Porsche (ETR:P911_p) and Renault (EPA:RENA).
In a virtual Q&A session held on August 1, Fuchs Petrolub's Chief Financial Officer conveyed an unexpectedly positive outlook.
The discussion suggested that the third quarter has commenced positively, mirroring the performance seen in the second quarter. This comes as a contrast to the 2023 earnings reports from the Europe, Middle East, and Africa (EMEA) region, which had been less encouraging.
The company has observed favorable developments across various geographies, setting it apart from the broader industry trends in the EMEA region.
After a period of stable raw material costs, Fuchs Petrolub anticipates potential inflation in the second half of 2024. This would affect base oils groups I and III, which had previously been experiencing deflationary pressures, as well as additives.
The CFO's comments indicate that Fuchs Petrolub is showing improved resilience in its operations. The company's performance and strategic outlook appear to be robust, especially in the context of the current economic environment and the challenges faced by the automotive sector.
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