Berenberg has downgraded Umicore SA (EBR:UMI) from Buy to Hold, stating that the shares have almost reached the broker’s price target. Consequently, the target price was reduced to €23.20 from €23.50, and the U.S. ADR target was cut to $6.66 from $6.90.
The analyst highlighted that cobalt prices are now just under $56,000 per tonne, which is more than 70% higher than a year earlier, but futures curves suggest a largely flat outlook. Berenberg added that the current hawkish tilt of the U.S. Federal Reserve may limit near‑term upside for precious‑metal prices.
The broker warned that the Democratic Republic of the Congo’s insistence on export quotas could force China, the world’s largest battery maker, to double down on cobalt‑free lithium‑iron‑phosphate (LFP) batteries. This shift would further disadvantage Umicore’s loss‑making cathode materials business, which is exclusively focused on cobalt‑containing technology.
Weakness among Umicore’s automotive customers was also flagged, with BMW’s profit warning on June 17 cited as capping a series of earnings downgrades for automotive end‑customers. While Umicore remains the largest player in gasoline autocatalysts—Johnson Matthey holding roughly 15% of that market—its largest earnings exposure is to the automotive sector, making the stock vulnerable to the earnings headwinds faced by its customers.
Berenberg trimmed its sales, EBIT and earnings‑per‑share estimates for 2027 and 2028, citing lower cobalt‑related sales and modestly lower catalysis sales, while leaving its 2026 estimates unchanged. The bank noted that Umicore shares trade at about 7 times 2026 enterprise value to EBITDA.
Potential upside could arise from a successful exit from the cathode materials business or from monetising the semiconductor‑exposed parts of Umicore’s Specialty Materials unit. This potential is supported by the appointment of restructuring expert Lily Liu as chief financial officer, although Berenberg cautioned that neither development is imminent.