Evonik Flexes Pricing Power to Shield Pharma Margins as Geopolitical Headwinds Bite

Evonik raises prices on Rexim pharma acids to offset energy and raw material cost surges. Q1 revenue fell 9% but adjusted EBITDA beat forecasts. Stock up 34% YTD, though RSI near overbought.

The specialty chemicals group is moving to protect its most sensitive business line. Evonik has raised prices across its Rexim portfolio of pharmaceutical amino and keto acids, a direct response to the surge in energy and raw material costs triggered by the escalating conflict in the Middle East. The company is effectively passing those higher input expenses on to customers in an effort to keep profitability in the health-care segment steady.

The decision comes during a quarter that showed a sharp contrast between top-line pressure and underlying earnings resilience. Revenue fell 9% year-on-year to €3.43 billion, yet adjusted EBITDA landed at €475 million — comfortably ahead of Evonik’s own forecast of €450 million. While that operating profit still dipped 15% from the prior year, the fact that it beat internal expectations in a difficult environment sent a strong signal to the market. Net profit more than halved to €125 million from €233 million, and free cash flow eased only slightly to €183 million.

Customer behavior has provided a short-term buffer. Geopolitical uncertainty has prompted purchases in advance, creating a wave of stockpiling that buoyed demand in the first quarter. Management expects that effect to linger into the second quarter of 2026, helping to sustain volumes even as the broader macro picture remains clouded. But the group acknowledges this is a temporary tailwind. Once those precautionary orders subside, regular demand will need to carry the load in the pharma segment.

The share price has been on a powerful run this year. Evonik stock closed at €17.87, up 2% on the day, extending its year-to-date advance to 34.16%. That rally has pushed the shares well above their 50-day moving average, but technical indicators flash a note of caution: the relative strength index stands near 71, a level that typically signals overbought conditions. Even so, the stock trades 13.25% below its 52-week high, suggesting there may still be room to run if fundamentals hold.

For the full year 2026, Evonik is sticking with its EBITDA corridor of €1.7 billion to €2.0 billion. The second quarter is expected to deliver around €550 million in adjusted EBITDA, an 8% increase compared with the same period last year. Underpinning that outlook is a continued push into specialised applications — including 3D-printed personalised drug delivery systems — as the company leans further into higher-margin niches.

Analysts are taking note. Barclays has an “overweight” rating on Evonik with a €17 price target, citing the strong quarterly performance and a positive forward view. The next annual general meeting is scheduled for early June.