BNP Paribas Upgrades Novonesis to Neutral
BNP Paribas upgraded Novonesis and its American depositary receipts from “underperform” to “neutral” on 3 July 2026, citing a pullback in valuation after the company lagged the broader ingredients sector by roughly 20 % year‑to‑date despite solid operational performance.
The broker noted that Novonesis’ valuation has fallen to 24 times projected 2027 earnings, representing a 20 % premium to specialty‑ingredients peers, down from a 40 % premium at the end of 2025. The stock closed at 425.8 Danish kroner on 2 July, against a BNP Paribas target price of 415 krone, implying a 3 % downside.
Sector‑wide, BNP Paribas reported that forward‑earnings multiples remain at 19 times, a 10 % discount to long‑term historical averages and 40 % below the sector’s peak. The analysts highlighted a sector rebound driven by improving volume sentiment, easing oil prices, and better positioning.
BNP Paribas identified Kerry, Sensient and Symrise as its top picks within the sector, rating all three “Outperform.” It observed that while the bar for impressing in the second quarter has risen, firms that can reassure on volume resilience and manage input inflation in the second half can still outperform.
The broker expressed lingering concerns about the sustainability of Novonesis’ long‑term organic growth but said 2026 estimates are broadly in line with consensus and that a guidance upgrade could be possible at the upcoming second‑quarter results.
Regarding cost outlook, BNP Paribas expects higher input costs in the second half of the year but considers them manageable given the company’s pricing power and the moderation of raw‑material inflation, which has been relatively benign in 2026. It flagged higher fertilizer costs and a greater likelihood of El Niño‑related weather disruptions as potential watch points for 2027, though these are deemed manageable through longer‑term procurement planning and price initiatives.