German chemical company Lanxess gets double upgraded by JPMorgan; shares soar

JPMorgan has upgraded shares of German chemicals group Lanxess AG by two notches and now recommends overweighting them. The company is set to gain a competitive advantage due to supply chain disruptions caused by the conflict in the Middle East, which should boost earnings, analysts said.

JPMorgan on Wednesday upgraded Lanxess shares to “overweight” from “underweight,” Bloomberg reported. Markets were reacting to the news positively. On Wednesday, the company’s shares jumped 16% in Frankfurt to EUR16.37 apiece. This marked the steepest intraday gain in almost a year, Bloomberg noted. In early trading on Thursday, the stock was up another 2.4%.

Bloomberg described the upgrade as a rare piece of positive news for the company’s investors. They have long been concerned about high energy costs, trade barriers, and competition from Chinese chemical producers. As a result, Lanxess shares have fallen 47% over the last 12 months – including Wednesday’s rally.

“The company appears best positioned to benefit near term from APAC supply disruptions tied to the ongoing Middle East conflict, given its status as one of the few – potentially the only – Western suppliers in select key product chains,” analysts Chetan Udeshi and Angelina Glazova said in a research note cited by Bloomberg.

The war between the U.S. and Iran has led to the closure of the Strait of Hormuz – a key transport corridor for many commodities. Before the conflict, it accounted for about 20% of global crude oil supply flows, a significant share of liquefied natural gas shipments, and roughly a third of global fertilizer trade.

At the same time, JPMorgan raised its earnings estimates for Lanxess for 2026 and 2027. The analysts wrote that while the magnitude and duration of the earnings upside will depend on the length of the conflict and demand elasticity, the impact on second quarter results is likely to be “very significant.”

Lanxess reported its 2025 results on March 19. The company said revenue fell nearly 11% to EUR5.67 billion, while EBITDA declined 16.9% to EUR510 million. It described the last year as extremely challenging for the entire chemical industry due to geopolitical tensions and weak demand across most sectors. The company expects positive momentum no earlier than the second half of 2026, linking it not to the Middle East conflict but to Germany’s infrastructure stimulus program.

Wall Street overall is mixed on Lanxess: eight analysts rate the stock “hold,” five “buy,” and four “sell.” The average target price of EUR18.18 per share implies 11% upside versus the closing price on Wednesday.