Jefferies has adopted a cautious stance on the chemicals sector, noting a subdued revenue outlook and persistent pricing headwinds in key export markets. According to the brokerage, leading innovators are guiding for flat revenue in calendar year 2025, primarily due to pricing pressure in Latin America, a critical market for crop protection chemicals.
The report highlights that Chinese agchem exports remain elevated, contributing to oversupply concerns, while global crop prices are showing a mixed trend, adding to the uncertainty. Additionally, refrigerant gas (refgas) markets stayed flat year-on-year in Q4, reflecting weak demand conditions.
Among individual names, PI Industries is said to be facing demand peaking in a key product and a slower-than-expected ramp-up in its pharma segment, though it still remains one of Jefferies’ preferred picks in the sector.
The brokerage also sees strong long-term earnings visibility for Navin Fluorine (NFIL), driven by the ramp-up of long-term contracts. On the other hand, SRF’s valuation appears extended, with Jefferies citing limited visibility on near-term earnings growth.
In conclusion, Jefferies continues to prefer PI Industries and NFIL in the current environment, given their strategic positioning and differentiated growth levers.
Disclaimer: This article is for informational purposes only and is based solely on brokerage reports and publicly available data. It does not constitute investment advice or a recommendation to buy or sell any securities. Readers are advised to consult a certified financial advisor before making any investment decisions.
