Evonik's Earnings Jump 40% but JPMorgan Sees a Restructuring Bill Waiting in 2027/ 28

Evonik's third-quarter report card landed with a flourish on Tuesday: adjusted EBITDA climbed 40% year on year to EUR 629 million. Within 24 hours, two of the world's biggest brokerages had moved their price targets — and neither moved them far enough to endorse the stock.

Deutsche Bank Research lifted its target to EUR 22 from EUR 18 while keeping a Hold rating, with analyst Virginie Boucher-Ferte recalibrating her estimates to the quarterly figures. JPMorgan went the other way in spirit: it raised its target to EUR 15 from EUR 14 but stuck with Underweight. The shares closed Tuesday at EUR 21.40, below Deutsche Bank's new marker and comfortably above JPMorgan's.

Two Targets, Two Very Different Messages

The gap between the two revisions tells its own story. Deutsche Bank's upgrade reflects the improved earnings picture and, in part, the takeover interest from BASF that has been propping up the stock. Boucher-Ferte cautioned, however, that further upside may be limited so long as Evonik refuses to enter formal negotiations.

JPMorgan's Chetan Udeshi is looking past the headline numbers entirely. His concern centers on restructuring charges expected in the 2027/28 financial year, which could weigh on free cash flow despite the clear improvement in operating results. In other words, a higher target is not a buy signal — the cautious rating stays, and the gap between adjusted EBITDA and the cash actually left over is where his reservation lives.

That distinction matters for anyone reading the quarter as a clean win. The guidance upgrade Evonik issued alongside the numbers — adjusted EBITDA for 2026 now expected in the upper half of the EUR 2.0 billion to EUR 2.2 billion range — applies explicitly to the adjusted earnings metric, not to free cash flow. Management also flagged continued weak economic growth and geopolitical uncertainty as the backdrop. CFO Michael Rauch said on Tuesday that Evonik anticipates a good start to the coming year, according to Reuters.

The 24-Euro Question Still on the Table

BASF's raised takeover offer, announced just over a week ago, stood at EUR 24 per share, according to Handelsblatt. Evonik turned it down. In an ad-hoc release, the executive board said it would not enter takeover negotiations on the basis of the information available — while leaving the door open to a purely informational, confidential exchange with BASF.

That refusal is the fulcrum on which Deutsche Bank's thesis rests. The bid supports the share price, but the potential for more is capped while the company keeps formal talks at arm's length.

EUR 52 Million Bet on Silicones

Alongside the quarterly figures, Evonik confirmed the completion of its silicone platform expansion in Essen, a EUR 52 million investment that adds a new production facility and a tank farm, boosting capacity for organomodified silicones.

For investors, the quarter presents two separate ledgers. The operating story is strong and getting stronger. The financing story — what survives the restructuring charges Udeshi expects in 2027/28 — has yet to be proven. Those charges remain a forecast, not a reported result. Until the cash flow confirms the earnings strength, the cautious calls are likely to stand.