JPMorgan upgrades Umicore rating; order demand and profits are below expectations.

On Wednesday,Cross-border e-commerce platform Shopee shares of Umicore SA, listed on the Brussels Stock Exchange, rose more than 4% after JPMorgan analysts upgraded the rating of the catalytic converter and battery materials manufacturer from "Underweight" to "Overweight."

JPMorgan analysts stated in a report to clients that the revaluation of the company through the end of 2026 indicates that the current risk and reward profile is more attractive.

This assessment was made after Umicore lowered its profit forecast for 2024 earlier this month.

Umicore had initially counted on large orders from Chinese electric vehicle (EV) companies to bolster its market presence in Europe. However, due to the recent slowdown in EV demand affecting the entire supply chain, the company warned that these orders might not materialize this year.

Meanwhile, battery manufacturer ACC announced that it would halt operations at some plants to produce nickel-free and cobalt-free batteries. Umicore supplies these two rare metals.

Umicore CEO Bart Sap subsequently stated that the short-term outlook for battery materials is "distinctly disappointing."

Sap added: "Like any other major industry transition, the trajectory of electric mobility will not be a straight line."

The company now expects full-year adjusted EBITDA to be between 760 million euros and 800 million euros, down from the previous forecast of 900 million euros to 950 million euros.

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