Evonik's €80 Million Bet on Biotech Meets a Shareholder Question Mark

Deutsche Bank reiterates Hold on Evonik with an 18-euro target as RAG-Stiftung says a full stake sale is permitted under its statutes.

Evonik has wrapped up two days of analyst briefings ahead of its third-quarter report on 3 November, giving the market a fresh look at how the specialty chemicals maker is faring on the operating front. Deutsche Bank Research reaffirmed its "Hold" rating on the Essen-based group, with a price target of 18 euros.

The stock last changed hands at 20.62 euros, putting Evonik's market capitalisation at 9.46 billion euros. That valuation still reflects a tug-of-war between the company's internal overhaul and the wider debate about consolidation in the sector.

RAG-Stiftung Keeps Its Options Open

Sentiment got a jolt on Wednesday when RAG-Stiftung, which by earlier accounts owns roughly 43% of Evonik, told Reuters that a full sale of its stake is permitted under its statutes. Any such move would require sign-off from the foundation's board of trustees. Crucially, the foundation attached no concrete intention to sell to that statement.

On the valuation side, DZ Bank analyst Peter Spengler lifted his fair value for the shares to 22 euros from 21 on Monday, keeping a "Buy" rating. He pointed to computational upside from a conceivable takeover by BASF, while flagging open questions around financing, potential synergies and where RAG-Stiftung ultimately stands.

A Tentative Approach, Confirmed but Not Advanced

Those takeover musings have a concrete origin. Management confirmed on 25 September that it had received an unsolicited approach from BASF regarding a possible voluntary public takeover offer for all Evonik shares. The company made clear, however, that no talks are currently underway between the two parties.

The stock has been a standout performer regardless of the bid chatter, posting a gain of 54% since the start of the year. On Thursday it touched a 52-week high of 20.64 euros. For the bulls, that run shows the market is rewarding the realignment story; for the sceptics, it raises the bar for what the standalone plan must deliver.

Tailor Made: Cuts Now, Relief Later

Management is pressing ahead with its internal restructuring under the "Evonik Tailor Made" banner, which will see 3,200 positions eliminated worldwide. Roughly 2,150 of those cuts fall on German sites. The second phase of the programme is pencilled in for 2027 through 2029.

Because compulsory redundancies have been ruled out, the job reductions demand extensive negotiation and must be carried out in a socially acceptable way — a constraint that naturally slows the pace of structural cost savings. Meaningful relief on the cost line is therefore unlikely to arrive soon.

Portfolio Trimming as a Funding Lever

A key plank of the strategy is the planned disposal of peripheral businesses. The sales of Oxeno and Syneqt are being pushed forward on schedule, according to the company. If those divestments go through smoothly, they would hand the group extra financial room to manoeuvre, with the freed-up capital potentially flowing into higher-margin core operations.

Execution risk cuts both ways here. Delays in the Oxeno and Syneqt processes are far from impossible in the current market environment, and any stalling on the separation of business units would likely sharpen market scepticism.

Building Where the Growth Is

Even as it shrinks elsewhere, Evonik is selectively expanding. Construction began in mid-September at its Slovenská ?up?a site in Slovakia on an extension of its biotechnology capacity. The investment totals around 80 million euros, with completion targeted for early 2028.

That project sits alongside the broader effort to steer sites and investments according to clear role profiles, sharpening efficiency and focusing the business more tightly. Whether the standalone path can sustainably lift profitability is the question investors must now weigh — and the answer hinges on keeping the divestment timetable intact. Should the disposal processes stay on plan, the bullish case retains its validity and shareholders may grant management the runway it needs. Should the schedule slip, confidence in the long-term targets through 2029 could erode quickly, and the valuation could adjust downward in short order.

The next hard catalysts are official completion notices on the Oxeno and Syneqt sales, alongside any further detail on how the Tailor Made phase will take shape. Until then, the market is left choosing between long-term transformation potential and tangible execution risk — with the 3 November quarterly figures set to show how the realignment is landing in today's trading environment.