Berenberg announced on Tuesday that it had initiated coverage of Clariant shares with a buy recommendation and a price target of 16.8 Swiss francs, stating that it perceives a clearer trajectory for margin improvement.

In a research note, the analyst recalls that the share price of the Swiss specialty chemicals group has fallen by almost 50% since 2017, due to a number of unfavorable factors.

These include, among others, a strategic divergence (now resolved) with reference shareholder SABIC, the failure of a project in bioethanol (Sunliquid) and the more global difficulties that have hit volumes and profitability in the chemical sector, he points out.

But the analyst believes that these economic factors have also masked the progress made by the company in rationalizing its portfolio and costs in recent years, he points out in his note.

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