Jefferies cuts Lanxess to 'underperform' on debt related risks
** Jefferies cuts German chemicals maker Lanxess LXSG.DE to "underperform" from "hold", citing a too high financial risk related to its debt
** Lanxess is planning to sell its Urethane Systems business this year to reduce debt, which Jefferies says should provide some support
** However, it says Lanxess seems to be selling cash generative assets from a position of financial necessity
** The company's multi-year plan to upgrade its portfolio through divestments and M&A "does not appear to have shielded it (vs peers) from the extent of the cyclical downturn", it adds
** Although signs of demand recovery act as a short-term driver, the broker questions if this boost will last
** It notes Lanxess' FY guidance implies demand improvement throughout the year with above average H2 seasonality, while the broker expects its earnings recovery to at least lag peers
** Out of 24 analysts covering Lanxess, 11 rate the stock "strong buy"/"buy", nine "hold" and four "strong sell"/"sell" - LSEG
($1 = 0.9205 euros)
Reporting by Amir Orusov
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